Gold Faces Worst Monthly Drop in 14 Months Amid Strong Dollar and Geopolitical Tensions
Gold prices saw a modest increase on Friday, bolstered by a weaker dollar and ongoing geopolitical instability, but the precious metal is still on track for its biggest monthly decline in over a year. The 3% drop in November marks gold’s worst performance since September 2023, driven by a post-election sell-off following Donald Trump’s victory.
As of 1:40 p.m. ET, spot gold was up 0.5%, trading at $2,652.71 per ounce, though it remains poised for a weekly drop exceeding 2%. U.S. gold futures settled 0.6% higher at $2,681.
The decline in gold was largely attributed to the surge in the dollar earlier this month, fueled by expectations of fiscal spending, higher tariffs, and stricter immigration policies following Trump’s win. Despite the dollar index reaching its lowest point in over two weeks, it remains poised for a 2% increase this month.
The strong dollar has posed a significant challenge for gold, but geopolitical tensions continue to support the metal’s appeal as a safe haven. Market analysts, including Jim Wyckoff from Kitco Metals, suggest that the uncertainty surrounding Trump’s proposed tariffs could ultimately benefit gold as investors seek safety during times of economic instability.
“Global uncertainties continue to drive demand for gold,” noted Ole Hansen, head of commodity strategy at Saxo Bank. “Gold traditionally thrives in a lower interest rate environment, and with inflation concerns rising due to potential tariffs, we may see more demand for gold as a hedge.”
In addition to economic factors, geopolitical tensions, such as military clashes in southern Lebanon and Russia’s ongoing attacks on Ukraine’s energy infrastructure, are adding to the safe-haven demand for gold.
Meanwhile, other precious metals like silver, platinum, and palladium also saw gains on Friday but are still set for monthly losses. Spot silver rose by 0.9% to $30.54 per ounce, platinum increased by 1.7% to $946.83, and palladium climbed by 0.7% to $981.63. However, all three metals are expected to end November in the red.
