The panic is on with the new gold bulls as prices have declined precipitously since President Trump won the election. The various headlines from the financial media reflect the sudden concern:
Gold Prices Set For Worst Week Since 2021 in Aftermath of Trump’s Victory
Why gold prices skidded from record highs to a losing streak in just two weeks
Gold tumbles: Largest weekly drop in 3 years amid Fed moves
Gold set for biggest weekly fall in 3 years as Fed rate-cut bets ease
Gold Retreats From Record Highs Following Trump’s White House Victory
Meanwhile, the move down in gold prices this month, while violent, only returned prices to September levels for this year.
While the gold naysayers will say everyone has shifted to cryptocurrency and equities, there’s a bit more to the story than that. For perspective, let’s take a tour of gold prices throughout modern history after every Presidential election from 2000 forward.
2000:
2004:
2008:
2012:
2016:
2020:
Is this a trend to be concerned about or something bigger? Or maybe it’s just the annual seasonality where traders use any excuse to take profits. If one looks at charts throughout history of how gold behaves from the third quarter into the first of the year, it’s down the majority of the time, from anywhere down 2% to as much as 12%.
Thus ignore the panic and use this current seasonal decline to one’s advantage as at some point, the Fed and the new administration will wake up to the reality that they must inflate or die.
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