Yes, gold prices are still tracking the dollar. But the fact is, that is not the most consistent factor in gold movements. It’s true that, generally, gold prices decrease as dollar strength increases, but not always.
What gold is most known for is its status as a “safe haven”. In times of economic or political turmoil, gold is where the money goes. And that’s not happening at the moment.
It’s not as though, all of a sudden the USA’s new president-elect has had a whole new image overhaul. His comments on a public social network platform cause significant stock price fluctuations. And that little bit of economic mayhem is just a tiny microcosm of what is expected to be major upheaval at a time when other formerly stable countries are experiencing economic and currency turmoil of their own.
Outside of wartime and major depressions or crashes, rarely has the world’s overall economic outlook been so unstable. And yet gold prices continue to plummet.
Gold was actually experiencing a little bounce when news began circulating that a Russian envoy to Turkey had been killed. Almost at the same time, the world learned of what was almost certainly a terror attack in Berlin.
Yet, instead of gold prices jumping higher, which was always expected to happen when news of terror or political feuds between large countries became public, gold actually dropped.
So the question is, have the rules changed permanently? Or is there something else at play that isn’t yet evident?
Another little anomaly is that gold prices often get a little bump at this time of year due to the rise of demand in India. November is the biggest month of the year for weddings and the demand for goal is always highest at that time.
Gold bugs were hoping that maybe that didn’t happen this year for some reason, and that’s why gold stayed low. But no, gold demand in India absolutely soared in November this year, and it still wasn’t remotely enough to register as a blip in the gold market.