Trump's victory leads to gold's decline as investors shift towards stocks and cryptocurrencies.

• The election of Donald Trump has caused the dollar to strengthen, resulting in gold prices falling to their lowest point in two months.
• The bullion's rally has been halted by the recent slide, which has marked a series of record-breaking milestones over the past year.
• Maximilian Layton, Citi's global head of commodities research, stated that there is a pause in the bull market for gold and silver, and this trend may persist for the upcoming weeks.

On Thursday, gold prices reached a nearly two-month low due to risk-on sentiment and the ongoing strengthening of the dollar following the election of Donald Trump last week.

Gold prices have fallen by nearly 7% since the election results were announced, dropping to $2,559.2 per ounce. Gold futures on the New York Mercantile exchange were trading at $2,567.3.

Since Trump's victory, gold has fallen in six out of seven sessions, following a string of record-breaking achievements for bullion over the past year.

Maximilian Layton, Citi's global head of commodities research, stated that there is a pause in the bull market for gold and silver, and this trend may persist for the upcoming weeks.

Gold prices are predicted to decline as U.S. equities surge due to expectations of reduced taxes and regulations. Despite Trump's return to the presidency causing a surge in U.S. stocks to new highs, the rally has recently slowed.

Cryptocurrencies, including bitcoin, have experienced a postelection risk-on sentiment, with bitcoin briefly trading above $93,000 on Wednesday on the expectation that Trump will fulfill his campaign promises to the industry.

Layton stated on CNBC that Trump's appearance of having a red sweep and a deregulated, lower tax environment has led to an influx of money into equities and bitcoin, while simultaneously causing a decrease in gold holdings.

The dollar index has reached a one-year high, making gold expensive for holders of other currencies due to its greenback pricing.

Vivek Dhar of Commonwealth Bank of Australia wrote in a note dated Wednesday that the increase in the U.S. dollar is a reflection of how markets have factored in Trump's inflationary policy agenda, which mainly consists of tax cuts and tariffs.

Gold and silver are repricing to a less bullish trajectory as the market-friendly outcomes of the elections have put equities in "euphoria territory," according to Nicky Shiels, head of metals strategy at MKS Pamp.

Despite the decline in gold prices, market analysts remain hopeful about the underlying strength of the bullion market.

Despite the ongoing speculation about Trump's tariff proposals and their potential impact on the global economy, the underlying drivers of the gold market remain in place, Layton said.

Layton stated that as the situation unfolds, individuals will purchase gold and silver to mitigate potential risks.

If not increase, central bank demand for gold is predicted to remain strong due to the U.S. fiscal outlook and escalating geopolitical tensions, according to Canaccord Genuity. In the first half of 2024, central banks bought a record amount of gold.

The bank's analysts predict that if President-elect Trump's second term follows the confrontational approach of his first, international demand for gold as a reserve asset is likely to remain higher than demand for treasuries.

Higher gold prices are predicted due to a combination of increasing debt, political conflicts, and central bank demand, according to Canaccord Genuity.