Gold prices continued their downward movements during the early trading hours of Tuesday, marking the third consecutive session of declines, as gold is trading near its lowest level in nearly 7 weeks.
The sharp drop in gold prices is attributed to the strong rise of the US dollar, which has reduced demand for dollar-denominated commodities, including the precious metal. Markets believe that the US Federal Reserve may not rush into a rate-cutting cycle under Trump's administration.
In this context, it is worth noting that the elected president, Donald Trump, may adopt expansionary policies aimed at supporting the US labor market and stimulating economic activity in the United States, which could once again boost rising inflation.
Therefore, the central bank may not hastily cut interest rates aggressively for fear of inflation rising again, especially since the Federal Reserve aims to sustainably and not temporarily reduce inflation to a target of 2%.
On the other hand, gold trading faced strong downward pressure due to the record rise of the digital currency Bitcoin, surpassing the level of $89,000; as Bitcoin witnessed significant cash inflows, which diminished demand for gold.
Gold prices are awaiting the release of US inflation data for October, tomorrow Wednesday, to understand developments in the battle against rising inflation, which may have a significant impact on market expectations regarding the course of US monetary policy, ultimately affecting gold.
In terms of trading, spot gold prices sharply fell by about 0.68%, losing around $17 in value, reaching approximately $2,606.58 per ounce. Meanwhile, futures prices for gold for December delivery declined by about 0.37%, recording $2,607.90 per ounce.