The recent presidential election has caused a violent movement in the gold market and stock market on 8th November 2016.The price of gold fell to the lowest level on last Friday as the dollar boosted to 14 years high on the event of presidential election. On the other hand investors are fear due to the pending interest rate hike decision by the FED. The price of gold hit a significant low upon the strengthening of the US dollar which resulted $1202.05 per ounce. This price is the lowest since 3rd June 2016.Due to the presidential election the fiscal spending and cut taxes will most likely to effect the US economy positively and this strong positive tone in the US economy is driving the price of gold significantly lower in the market. In the eyes of trained professional the recent performance of the US economy pretty much favors the interest rate hike decision by the fed. Investors are cautiously waiting for the upcoming FOMC meeting minutes in this week to extract information regarding their rate hike in the month of December. According the FED rate hike monitor tools there 81.3% chance that the FED will hike their interest rate in the month of December which will bring fresh selling pressure in the gold market. The US dollar index also traded significantly higher and it was at 101.41 level on Friday, the highest since April 2003.The US index is the measure of the US economy against six major currencies in the world and a rise in the value of US index clearly indicates strong economic performance of the US in the recent days.
The strength of the US dollar is a most likely increase in the recent days. Since gold is the price in the dollar, investors are in fear that the price of gold is most likely to fall sharply upon the hike of the US interest rate in the month of December. Most of the central bank member thinks that the US economy is doing pretty well in the recent days and hiking the interest rate will bring positive impact the global market. On the other hand FED chair Janet Yellen also stated that they will hike their interest rate very soon as most of the factors are going in favor of them. Though leading economist suggest that the chance of rate hike in the month of December is 81.3% but some investors are stating that there is 95.4 % chance of rate hike in the month of December. The price of gold and silver is pretty much sensitive to the US dollar strength and a hawkish rate hike in the month of December will bring extreme vitality in the precious metal market. The price silver settled down at 1.32% or $16.55 an ounce which is lowest since 8th June 2016.On the contrary, the price of copper settled down at $2.46 a pound in the comex. So trading the precious metal at the current level will be extremely difficult due to pending rate hike decision by the FED and the recent week is also very important for the traders since FED is going deliver their view about the rate hike decision in the FOMC meeting minutes. The great Britain pound is falling sharply in the market but traders are expecting decent bounce from the high of 19th October 2016.This bounce might even help the great Britain pound to recover its loses to a great extent in the upcoming week. If things goes as plan as the FED then we are most likely to experience a sharp fall in the price of gold in the near term future upon the hawkish rate hike by the FED in the FOMC meeting minutes.
There has been a massive breakout in the price of silver since the long established uptrend in the silver has been broken during the event of the prudential election. But despite the broken bullish trend line the price found support near the 200 day SMA in the daily chart and currently exhibiting slight bullish momentum in the market. Despite the broken trend line technically the price of silver is showing a great deal of buying pressure in the market. In the eyes of trained professional both the silver and gold price might go significantly higher despite the strong US economy which will affect the global economy in the longer time frame. Most of the precious metal traders are now sitting on the sideline and waiting patiently for the FED regarding their FOMC meeting minutes. In the eyes of trained profession, a dovish hike from the FED might significantly alter the sentiment of the commodity market. Though the chances of dovish hike by the FED in the month of December is highly unlikely but investors are all aware of the sudden surprise by the leading economical bodies in the global market. Experts are suggesting that trading the precious metal at the current level has no guaranteed out on the contrary it will most likely to cause you more damage in the financial market. Mr. Trump as the US president has an anti-social mentality which impact the global market significantly all of sudden. Currently it seems like that there is no way that the dollar is going to lose its strength but the experts are well aware of the market sentiment which might even overdrive the fundamental factors of the economy. So it better to stay on the sideline and wait patiently until the dust settles down in the market.