Gold hits biggest one-day drop in nearly half a year, is the safe haven market gone? Note the Fed's interest rate decision at 3am.

Following the election of US Republican presidential candidate Trump, the US dollar index hit a four-month high, and the price of gold fell to a three-week low After the election results were released, the market focused on co -close the FOMC meeting. The Federal Reserve will be held at 8 Taiwan.
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a riverAfter President Trump was elected President of the United States, investors rushed to buy the US dollar.gold spotThe price fell 2.8% in one day on Wednesday, once falling to US $2,643.77, a new low since October 15 and the biggest one-day decline in the past six months. -now at US $ 2,663, which has changed so far +0.16% compared to yesterday.

Spot gold price. Source: investing.com

Rhona O’Connell, Head of Market Analysis, Asia and EMEA, StoneX analysisThe market initially expected the election results to be controversial, but Trump’s clear victory removed uncertainty and reduced risk factors In addition, Trump’s victory caused the US dollar to rise strongly .

Investors expect Trump to boost the dollar after he takes office as Trump is expected to propose new tariff policies, which could spur a rise in inflation and suspend the Federal Reserve after Trump won the election.dollar indexIt hit a four-month high, with the price peaking at 105.45 on Wednesday and now trading at 104.76, making US dollar-denominated gold more expensive for non-US dollar buyers.

Gold hits biggest one-day drop in nearly half a year, is the safe haven market gone? Note the Fed’s interest rate decision at 3am. Movement of the US dollar index. Source: investing.com

After the election results came out, the market took note of the decision of the FOMC meeting to generally expect to cut interest rates by 1 point this time dataIt shows that the current market expectation is that the probability of a 1-point interest rate cut is 97.4%.

Ole Hansen, head of commodity strategy at Saxo Bank, said that after Trump introduced new tariffs, the risk of rising inflation could slow down the pace of US interest rate cuts this week, but the speech after the meeting will be watched carefully by the market for signs of a pause in interest rate cuts.

Asian currencies face sell-off risk

Bloombergreportsince Trump won the election, Asian currencies have sold off, with the yen falling to the psychological level of 155 yen per dollar, and the yuan onshore approaching a 16-year low, bringing focus once again on Asian foreign exchange stability warned that a new round of tariffs imposed by the United States on its trading partners could trigger a race to lower currencies in Asia.

Asian currencies are preparing to face more downside risks this week, as the Federal Reserve will announce its interest rate decision on Thursday, and China‘s National People’s Congress Standing Committee will conclude its meeting on Friday. slow the pace of interest rate cuts, Asian currencies may come under pressure as China’s fiscal stimulus fails to satisfy investors.

Shoki Omori, chief trading strategist at Mizuho Securities, said:

There is no chance for Asian currency traders to relax this week.

Traders will carefully analyze the comments of Fed policymakers to assess the pace of future interest rate cuts Unexpected changes can shake the US dollar and thus affect regional currencies China’s National Transportation Standing Committee, as the highest authority of state power More stimulus measures are announced after this week’s meeting, but if they do not meet market expectations, traders may stress the impact of a round new US tariffs on China, causing the yuan to weaken again.