A HOLISTIC OVERVIEW OF GOLD BEFORE AND AFTER THE U.S ELECTION

MAJOR DRIVERS OF GOLD PRICES IN RECENT TIME
TECHNICAL VIEW
CONCLUSION

Market sentiment was cautious and leaned towards a risk off stance in the lead up to the U.S election. As a safe haven asset, gold attracted significant interest from market participants during this period. This heightened demand contributed to the notable surge in gold prices, culminating in an all-time high just few days before the election.
            In the wake of U.S election and amongst other fundamentals, the yellow metal created two months low to trade around $2,536 on the 14th of November 2024 which translates to about 9.05% decline from It’s all time high of $2790. However, as at the time of writing, the precious metal is rebounding around $2629 which denotes 2.90% weekly increase, this is during the Asian session on Wednesday 20th of November 2024. This rebound is majorly caused by a temporarily soft dollar and increased tension between Russia and Ukraine.

MAJOR DRIVERS OF GOLD PRICES IN RECENT TIME:
Below are some factors that shaped prices of gold in recent time:
Increased tension between Russia and Ukraine: Similar to what was witnessed before the US election, markets adopted a risk off stance this week after Russian President Putin approved an updated nuclear doctrine. This decision followed the US authorization for Ukraine to deploy long range missiles against Russian targets, significantly heightening geopolitical tensions. In response, investors sought safe haven assets, driving a notable surge in gold prices as it regained favor this week after creating two months low in the wake of the US election.
Stronger US Dollar: The dollar's significant post-election strengthening made gold more expensive for buyers using other currencies, reducing its appeal and dampening demand for about two weeks as they are negatively correlated. The dollar's rally has been supported by strong economic indicators and the Fed’s cautious approach to interest rate cuts. DXY rallied to reach one year high of 107.00 on the 14th of November 2024 before declining to 106.113.
Post-Election Sentiment (Flight to Equities and other asset classes): Following the result of the US presidential election, heightened investors optimism shifted focus away from safe haven assets like gold toward equities and other higher risk investments. This increased risk appetite was driven by expectations of pro-business policies under the president elect, including potential tax cuts, support for digital assets and other economic measures anticipated to enhance corporate profitability and economic growth. 
Interest Rate Expectations: Higher rates raise the opportunity cost of holding non-yielding assets like gold, pushing investors towards alternatives that generate returns, such as interest-bearing securities. Although Fed reduced rates by 75bps over the last two policy meetings, expectations for further cuts is tentative due to persistent inflationary pressures and robust economic data, which suggest limited room for additional monetary easing.

TECHNICAL VIEW
XAU/USD experienced decline of approximately 9.05% after reaching a record high of $2,790, to trade at $2,536 on Thursday the 14th of November 2024. The price dropped significantly in the wake of US election, Fed rate cut, fear of inflation and amongst others. The yellow metal is currently rebounding off this two-month low in the wake of this week softer dollar and tensions from Russia and Ukraine.
Examining the latest price movement, the price has broken out of the channel, with the red trendline acting as resistance, and is now hovering near $2,629. Technical analysts anticipate a slight retracement toward $2,615 and $2,582 before the next upward surge, with potential targets around $2,666 and $2,693. Conversely, if the price falls below $2,582, the next potential target is around $2,534. Further breakout beyond these levels cannot be ruled out.
Fig.1, Gold spot 1H, Trading view

CONCLUSION:
Despite the post-election pressures on the yellow metal, gold's long-term demand remains resilient, supported by its status as a safe haven asset during periods of economic uncertainty and persistent inflation risks. Market dynamics can shift quickly, as demonstrated this week when gold prices rebounded from a two-month low of November 14th. This recovery was fueled by a softer US dollar, with the DXY pausing its recent rally and heightened geopolitical tensions between Russia and Ukraine, which revived demand for gold as a protective asset. These factors underscore gold's enduring role as a hedge in volatile times.