Trump's 'Magic Dollar' Sinks Gold Fastest Since Covid Crash, Silver -$5 from Pre-Election Top
Thursday, 11/14/2024 15:38
GOLD and SILVER sank to 9-week lows against a surging US Dollar on Thursday, plunging 5.5% and 5.9% respectively from last weekend as new data continued to show world No.1 economy the USA outperforming the 2nd largest region Western Europe, while China's stock market fell hard.
Silver dropped to $29.68 per Troy ounce at the start of London bullion trading, down more than $5 from mid-October's 12-year high before rallying 70 cents.
Gold priced in the Dollar meanwhile rallied $30 after sinking to $2537 in London's spot market, bottoming over $250 per Troy ounce below
Halloween's all-time gold high.
That put this morning's LBMA London benchmark price 8.4% below its level of a fortnight ago – the steepest 2-week drop since Spring 2020's Covid Crisis, when the precious metal lost 10.9% over the 10 trading days to 23 March.
Gold then reversed that drop as the UK's Covid lockdowns broke the connection between London and New York's bullion markets, helping the 'safe haven' surge to new all-time highs almost 40% higher by August 2020 on
record gold investment buying.
Compared to the past fortnight's drop, gold has fallen harder 19 times in the post-Gold Standard era since 1971, led by the 25.2%
plunge of March 1980 starting on Silver Thursday.
Running close to that record drop was October 2008's 24.6% plunge
amid the global financial meltdown following the failure of Lehman Brothers, followed by the 21.3% plunge of August 1973, when the Dollar strengthened unexpectedly ahead of the Arab-Israel war and Oil Crisis.
"The USD is [now] a magical currency backed by carry, momentum, growth differentials, and impending fiscal and tariff kickers,"
Reuters quotes one spreadbetting bookmaker's analyst following the 'Red sweep' victory of Donald Trump and his Republican Party in last week's election.
Yesterday's US
consumer price inflation data matched analyst forecasts for October, but the US producer prices index today beat the Street's predictions with a rise to 3.1% per year on the 'core' measure excluding fuel and food.
Claims for US jobless benefits meantime slowed harder than consensus expectations for the latest weekly numbers.
New Eurozone data, in contrast, showed industrial output across the 20-nation currency union plunging 2.8% in September from 12 months before.
The Dollar's DXY index today broke above this summer's peaks to hit its strongest level since October 2023, while US interest rates on the 10-year Treasury bond hit the highest since start-July at 4.48% per annum.
Euro gold prices fell to €2411 per Troy ounce, a new 1-month low. UK Pound gold also hit its lowest in a month at £2004, down £150 from Halloween's high.
Shanghai gold prices ended last night at a 5-week low while the CSI300 index of China-listed corporations sank by 1.7% as investors poured into government bonds, driving the yield offered by a new issue of Dollar-denominated debt
down below comparable US yields amid worsening disappointment over Beijing's weak economic stimulus plans.
European bourses rose sharply as the Euro and UK dropped on the currency markets. New York equities fell at Thursday's opening, dropping 0.5% from Monday's new all-time closing high.
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