After hitting a new all-time high on the eve of the US presidential election, gold prices plummet to a three-week low in the face of Donald Trump’s decisive victory thanks to strong Treasury yields and a stronger dollar.

In a context of intense political polarisation, uncertainty over the US presidential election and geopolitical tensions in the Middle East pushed the gold price above 2,594 euros per ounce, setting a new all-time high just days before the US elections and reversing its proclivity to underperform its long-term average price in the run-up to the presidential election.

This upward trend was already spurred by continued central bank purchases of gold and strong Asian demand for the precious metal. Even so, far from fulfilling the predictions of a close electoral contest predicted by the polls published by the mainstream media, Donald Trump’s landslide victory, winning a majority in the Senate, controlling the House of Representatives and getting the popular vote, has far surpassed the results of 2016 and evaporated investor uncertainty.

Gold falls as the dollar strengthens

As the election results sent the dollar to a four-month high and strengthened real yields on US Treasuries to levels not seen since July 2024, gold prices plunged 3 per cent to €2,456 per ounce, a three-week low and on track for their biggest daily loss in five months.

Improved expectations for economic growth and tax cuts along with concerns that tariffs, a higher fiscal deficit and Trump’s proposed immigration policies could revive inflation, explain the rise in the value of the dollar and government bond yields, making gold, which offers no yield, less attractive to investors.

Analysts point out that this may also result in the Federal Reserve not cutting interest rates as much or as quickly as expected. The yield on 10-year US Treasuries rose 17 basis points to a four-month high of 4.46%, pending the Fed’s announcement later today.

Is this a good time to buy gold?

Unsurprisingly, this combination of political and economic events has caused a shift in market sentiment, affecting the attractiveness of gold, which is inversely proportional to the value of the dollar.

Still, now might be a good time to add gold to your investment portfolio. Some analysts believe that demand will continue to push prices higher, and expect it to reach $3,000 per ounce in the coming months. This makes it an attractive buying opportunity at current prices for those looking to expand their gold holdings.

Moreover, at a time when central banks continue to increase their gold reserves and the armed conflict between Israel and Iran continues to escalate, there is a risk that a new energy crisis could erupt, which would boost demand for gold as a safe-haven asset for investors and savers alike.

If you want to discover the best option to protect your savings, enter Preciosos 11Onze. We will help you buy at the best price the safe-haven asset par excellence: physical gold.