Totafx Capital Market Update
Gold (XAU/USD) fell over one percentage point on Wednesday, trading in the $2,710s, as the US Dollar (USD) strengthened following Donald Trump’s win in the US presidential election. According to the Associated Press, Trump secured the presidency with 277 electoral votes over Vice President Kamala Harris’ 224. Market sentiment around Trump’s economic agenda and expected tariffs are fueling the USD rally, impacting Gold, which is primarily priced and traded in USD.
In addition to the stronger Dollar, Gold is under pressure as investors rotate capital out of safe-haven assets, such as Gold, into higher-risk assets, including Bitcoin (BTC) and equities.
Trump’s remarks on resolving Middle Eastern and Ukrainian conflicts quickly are also likely weighing on Gold. For example, Trump has claimed he could end the Russia-Ukraine war in “24 hours.” Despite being viewed as ambitious, such assertions may be pulling safe-haven flows away from Gold.
Gold Under Pressure as Trump’s Economic Policies Influence Markets
The US Dollar, Bitcoin, and US stock futures have rallied as Trump’s election victory suggests a return to policies favoring tax cuts and deregulation. The US Dollar Index (DXY) rose over 1.3% to a peak of 105.32 during Wednesday’s trading, reflecting the market’s response to a probable Trump administration.
US stock futures were also up, with the S&P 500 futures gaining 2.2% at 5,909 in pre-market trading, and Dow 30 futures rose by over 1.3% to 42,770. The anticipated tax reliefs have buoyed market optimism.
Bitcoin, too, reached a new all-time high of $75,407, driven by expectations of a looser regulatory environment for cryptocurrency. This capital shift has drawn funds away from commodities and bonds, affecting US Treasuries, Oil, Silver, and Copper prices.
Technical Analysis: Key Support Levels for Gold
Gold has now dropped to support at $2,709, marking a former range base. In line with Totafx Capital’s technical analysis principles, the current downtrend suggests vulnerability to further weakness, especially if XAU/USD breaks below the daily low of $2,701. Such a break could open the path to the next support level at $2,687, a prior swing high on September 26.
The Relative Strength Index (RSI) is declining with price, indicating sustained bearish momentum. However, Gold remains in a medium- to long-term uptrend, so a reversal remains a possibility, albeit without current technical signs.
If XAU/USD were to break above its all-time high of $2,790, the uptrend would likely reassert, targeting the next resistance level at $2,800, with a possible extension to $2,850, a key psychological level.
Totafx Capital Perspective
For traders, these shifts highlight both risk and opportunity. With the market response to Trump’s election favoring USD and risk assets, XAU/USD could see continued downward pressure. Totafx Capital continues to monitor these trends closely, providing actionable insights to help traders make informed decisions in this volatile landscape.