Cassiar Gold Corp. (TSXV: GLDC, OTCQX: CGLCF)
Revitalizing the Cassiar Gold District in British Columbia, Canada
Gold prices rose on Friday, with spot gold closing near $2,657.84 an ounce, but still down 1.9 per cent for the week after Monday’s sharp fall. The precious metal fell more than 3% in November, its biggest monthly decline since September 2023, as Trump’s victory triggered a sell-off in safe-haven assets.
Jim Wyckoff, senior market analyst at Kitco Metals, said it is uncertain how Trump’s promised tariffs will affect the precious metals market. Uncertainty at the tariff level could lead to slower economic growth and could actually be positive for the gold market from a safe-haven perspective.
Ole Hansen, head of commodity strategy at Saxo Bank, said in a note that ongoing global uncertainty, particularly the Russia-Ukraine conflict and chaos in the Middle East, will continue to drive demand for gold as a safe-haven asset.
Some investors may be linking the current sell-off in the gold market with Trump’s first win eight years ago. On November 8, 2016, Trump defeated Hillary Clinton to become the 45th president of the United States. On Election Day, gold closed at $1,276 an ounce before suffering a big sell-off. Eight trading days later, gold was down 5.2%. By late December 2016, more than six weeks after Trump’s election victory, gold had fallen 11.5 percent.
Rich Checkan, president and chief operating officer of Asset Strategies International, said in an interview with Investing News Network this week that gold prices took a dip after the U.S. election, but the bull market in precious metals is far from over. Checkan believes that the sell-off in precious metals after the US election was necessary and very healthy for the development of the bull market. These are buying opportunities, not the end of the bull market.
As a matter of fact, if we compare the current market environment to the one after Trump’s election victory in 2016, it’s not hard for investors to see that eight years ago, the Fed was accelerating its first rate hike cycle in about a decade, pushing the dollar higher and hitting gold. That helped fuel a mass exodus of gold futures speculators and U.S. equity investors, leading to a sharp fall in gold prices. While things nowadays are different.
Right now, the Fed is in the midst of a young rate-cut cycle. While the pace of rate cuts may slow after Trump takes office, it is different from rate hikes. As a result, the sell-off in gold since the US election has been much smaller. After an initial knee-jerk sell-off, U.S. investors quickly regained their interest for gold.
In the week of November 18 to 22, gold prices rose for five consecutive days, with a cumulative gain of nearly 6%, the largest weekly gain since October 2023.
Goldman Sachs recently released a research note, saying that under the threat of Trump’s tariff stick, central banks around the world will increase their purchases of gold, providing support for further gains in gold prices.
