KVB Market Analysis | 12 Nov: Gold Drops Sharply on Trump's Election and Rising US Treasury Yields

Product: XAU/USD

Prediction: Decrease

Fundamental Analysis:

On Monday, November 11, gold prices dropped more than 2%, mainly due to a stronger US dollar and expected changes in fiscal policy after Donald Trump‘s re-election. Spot gold closed down $64.75, a 2.41% drop, at $2,619.23 per ounce, hitting a low of $2,610.61 during the day. This decline was driven by a stronger dollar, rising U.S. Treasury yields, and increased risk appetite in financial markets following Trump’s victory last week. With the dollar reaching a four-month high, gold fell over 2% on Monday. Rumours that Robert Lighthizer, a supporter of tariffs, might lead the U.S. Trade Office added to investor worries. Markets also expect Fed Chair Powell to take a cautious approach next year, which supports the dollar and puts pressure on gold.

Technical Analysis:

On Monday, gold briefly dropped to around $2,610 per ounce, close to breaking the recent support level of $2,603 per ounce from October 10. If it falls below this support, it could open the way for further decline. In this case, the next support level would be $2,600 per ounce, followed by the 100-day Simple Moving Average (SMA) at $2,534 per ounce. If gold breaks above $2,700 per ounce, buyers may focus on the 20-day moving average at $2,718 per ounce. A move above these levels could target $2,750 per ounce, followed by the October 23 high of $2,758 per ounce. With the Relative Strength Index (RSI) moving away from the midpoint, momentum has turned bearish, suggesting that golds decline could continue.

Product: EUR/USD

Prediction: Decrease

Fundamental Analysis:

EUR/USD fell by 0.59% on Monday to $1.0655, hitting as low as $1.0629, the lowest since April this year. Since Trumps election win last week, the euro has gradually declined, sparking concerns about possible new tariffs under his administration. Multiple media reports indicate that Trump plans to bring back Robert Lighthizer, known for his tough stance on trade, which has added pressure on the euro. The Financial Times, citing sources, reported that Trump has invited Lighthizer to be the U.S. Trade Representative in the next government. Although Lighthizer reportedly preferred other roles, like Commerce Secretary, Trump requested he take on the trade role. The report also mentions that Trump is likely to choose Linda McMahon for Commerce Secretary.

Technical Analysis:

The EUR/USD daily chart shows strong downward momentum, with the pair continuing to fall after breaking below the 200-day EMA at $1.0895. The price is now well below both the 50-day EMA at $1.0960 and the 200-day EMA, indicating a clear bearish trend in the short to medium term. This move suggests that sellers are in control, with the pair approaching the next support level near $1.0650. If the price closes below this support, the downward momentum could strengthen, possibly targeting the key level of $1.0600. However, if buyers step in around the current levels, EUR/USD may attempt to retest the $1.0750-$1.0800 resistance area.

Product: BTC/USD

Prediction: Increase

Fundamental Analysis:

Bitcoin surged to a high of $88,887 after Donald Trump‘s election win, with the Republican Party close to taking control of the House with 214 seats, just four short of a majority. A Bitcoin advisor in Trump’s team revealed that at least one nation is actively buying Bitcoin, hinting that something significant may be happening. David Bailey, CEO of Bitcoin Inc and a Bitcoin strategy advisor for Trump‘s campaign, shared that this nation has now become one of the top five holders of Bitcoin. Rumors about countries buying Bitcoin have circulated for years, especially after El Salvador adopted Bitcoin as legal tender and Bhutan explored Bitcoin mining. Earlier this year, social media speculated that Qatar had bought billions of dollars’ worth of Bitcoin. Trump has pledged to create a national Bitcoin reserve, and Michael Saylor, CEO of Bitcoin giant MicroStrategy, emphasized that “Bitcoin could be the next strategic reserve asset.”

Technical Analysis:

Bitcoin has been on a strong upward trend, showing no signs of slowing down. The latest rally pushed its price above $88,000, bringing Bitcoin's total market value to over $1.67 trillion for the first time. Bitcoin might give back some of these gains and end the year around $58,974. Analysts remain optimistic about Bitcoin‘s 17% gain so far this month, as November’s average return is 44%. If Bitcoin sees a strong rebound by year-end, a bear market may come in 2025. Since breaking the $73,777 resistance level on November 6, Bitcoin hasnt looked back. The rise above $84,000 has pushed the Relative Strength Index (RSI) into overbought territory, suggesting a small pullback or pause may happen soon. Support levels are at $80,000 and then $77,000. A slight pullback could improve the chances of reaching the next target at $93,554.