Gold Drops Sharply to Three-Week Lows

Gold prices fell over 3% on Wednesday, hitting three-week lows as investors moved into the dollar following Republican Donald Trump’s election as U.S. president.

Market participants are also awaiting the Federal Reserve’s interest rate decision on Thursday for further guidance on the central bank’s easing cycle, which has fueled gold’s impressive rally to record highs this year.

Spot gold dropped 2.8% to $2,665.79 per ounce, after reaching a three-week low of $2,652.19. This marked gold’s largest daily loss in five months. U.S. gold futures also fell 2.7% to $2,674.50.

Investors noted that Trump’s presidency could strengthen the dollar, potentially leading the Fed to pause its easing cycle if inflation rises due to planned tariffs.

The U.S. Dollar Index hit a four-month high, making gold more expensive for overseas buyers. Gold is now caught between the risk of rising inflation—which could slow the pace of rate cuts—and the implementation of tariffs. The Federal Open Market Committee is expected to announce another rate cut on Thursday, but post-meeting remarks will be closely analyzed for signs of a potential pause.

In other metals, spot silver dropped 4.7% to $31.13 per ounce. Platinum slid 1.5% to $984.86, and palladium fell 3.5% to $1,038.25, with all three metals hitting three-week lows.