As good as gold? The safe haven asset has seen prices face their worst drop in more than three years following the election of Donald Trump in the US election on 5 November. Traders were quick to react to what a Trump victory could mean for the asset class, with gold pieces falling 2.7% on the day that the Republican contender for the White House declared victory. Throughout the whole month, gold prices are now down 6.6% to USD 2,570.10 per ounce.

The prospect of high interest rates for longer is helping drive the fall, with the US Federal Reserve signaling that its rate cut cycle may play out slower than initially forecasted — a problem for gold as a non-interest paying asset. Traders are also pricing in an uptick of inflation on the back of Trump’s proposed tariffs, draconian migration policies, and tax cuts, which could potentially persuade the Fed to hold back on rate cuts for even longer.

A stronger USD is likewise partly to blame, as a stronger greenback racks up the price of the precious metal for many international buyers as the metal is usually priced in USD.

The move towards Trump trades is also contributing to the sell-off, as investors flock to the likes of BTC and Tesla shares, “attracting money from typical safe havens like gold,” the Financial Times quotes MKS Pamp’s Nicky Shiels as saying.

Despite the recent dip, the metal is still up 29.2% over the last 12-month period — a decent notch above all of the world’s main indexes.

And some think that the gold rally still has a lot of gas left in the tank, including Shiels, who think that the recent fall in value “is not a reversal of the bullish trend, gold simply rose too quickly, and now it is reverting to a less bullish trajectory.” StoneX’s Rhona O’Connell even expects the asset to soon recover and pass the USD 3k at some point next year.

EGX30

31,462

+0.1% (YTD: +26.4%)

USD (CBE)

Buy 49.31

Sell 49.45

USD (CIB)

Buy 49.30

Sell 49.40

Interest rates (CBE)

27.25% deposit

28.25% lending

Tadawul

11,791

-1.2% (YTD: -1.5%)

ADX

9,443

+0.5% (YTD: -1.4%)

DFM

4,740

+0.2% (YTD: +16.8%)

S&P 500

5,871

-1.3% (YTD: +23.1%)

FTSE 100

8,064

-0.1% (YTD: +4.3%)

Euro Stoxx 50

4,795

-0.8% (YTD: +6.1%)

Brent crude

USD 71.04

-2.01%

Natural gas (Nymex)

USD 2.82

+1.4%

Gold

USD 2,570

-0.1%

BTC

USD 90,881.60

-0.4% (YTD: +115.1%)

THE CLOSING BELL-

The EGX30 rose 0.2% at Thursday’s close on turnover of EGP 3.4 bn (19.9% above the 90-day average). Local investors were the sole net buyers. The index is up 26.5% YTD.

In the green: B Investments Holding (+2.4%), Ezz Steel (+2.0%) and Alexandria Containers and Cargo Handling (+2.0%).

In the red: Telecom Egypt (-2.9%), Faisal Islamic Bank -EGP (-2.6%) and Egypt Kuwaiti Holding (-1.9%).

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