Gold prices dip with Trump’s victory seen as removing level of risk
Gold prices fell with news of former President Donald Trump's election victory, with the New York spot price at the end of trading Wednesday at $2,661 per ounce, down $82.50, a drop of about 3%, as the market saw his election as removing a level of risk.
Gold is usually considered a safe-haven purchase in risky times.
Nonetheless, gold prices are still high, and Rob McEwen, chief owner and chairman of McEwen Mining and founder of Goldcorp, said in an earnings webcast Wednesday that "in my mind, gold is heading higher despite this little drop today."
He said the United States, Canada, Europe, China and basically "everybody has printed a lot of money, and they have to pay back that debt. Gold is a hard asset you want to have in your pocket."
McEwen Mining owns the Gold Bar Mine in Nevada, the Fox Complex in Canada, and 49% of the San Jose Mine in Argentina, as well as owning a portion of McEwen Copper and its Los Azules Copper Project in Argentina.
CBS News quoted Angelica Leicht of "Managing Your Money" as saying Wednesday "this post-election plunge, which marked a three-week low, caught many investors by surprise and sparked speculation about what lies ahead for gold's price. While some investors might be wary of the price drop, viewing it as a sign of instability, others see it as a potential entry point."
She also said buying shares in gold producers provides exposure to gold price's performance without directly buying the precious metal. However, gold mining stocks are also affected by factors such as production costs, Leicht wrote.
Shares in companies producing gold in Nevada were mostly down on Wednesday. Newmont Corp. shares closed at $44.49, down $1.51, and Barrick Gold Corp. shares closed at $18.43, down 46 cents. Barrick and Newmont are joint venture partners in Nevada Gold Mines.
Shares of Kinross Gold Corp., which owns the Round Mountain and Bald Mountain mines in Nevada, closed at $9.85, down 18 cents, and Coeur Mining, which operates the Rochester gold and silver mine in Nevada, saw its shares close at $5.91, down 16 cents.
Shares of SSR Mining Inc., owner of the Marigold Mine in Nevada, were up 8 cents to $6.14. McEwen shares were at $9.09, down 8 cents.
Reuters reported Wednesday the markets were also looking ahead to a decision on interest rates coming from the Federal Reserve on Thursday. The central bank's easing of interest rates helped gold reach new heights this year.
Investors said Trump's presidency will bolster the dollar, causing the Fed to pause its easing cycle if inflation takes off after expected new tariffs, Reuters wrote, and Ole Hansen, head of commodity strategy at Saxo Bank, told Reuters the risk of rising inflation could slow the pace of U.S. rate cuts as tariffs roll out.
Trump has advocated for tougher tariffs on imports.
"Gold prices are falling sharply on Wednesday, as traders lock in profits amid a stronger U.S. dollar and surging Treasury yields following Donald Trump's projected return to the White House," wrote analyst James Hyerczyk at FX Empire as quoted by Kitco News.
"The sell-off in gold pushed prices through a key technical support level of $2,708.76, shifting the trend downward and further pressured the metal by breaking below the $2,697.28 pivot level," he said.
The silver price also was down Wednesday. The New York spot price closed at $31.12 per ounce, down $1.50.
