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Why Did Gold and Silver Fall on November 11?

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Gold reached five-month low levels

After falling for four consecutive trading weeks, gold prices fell on November 11 and reached more than five-month low price levels. On November 11, the COMEX gold futures contract for December delivery fell 3.3% to $1,223.5 per ounce. The COMEX silver contract for December delivery closed the day at $17.33 per ounce—a fall of 7.3%.

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Stronger dollar and improved market sentiment

The stronger dollar along with the continuously improving market sentiment due to Donald Trump’s election win have been weighing on the precious metal market. The decreased demand for safe-haven assets amid increased risk appetite caused gold and silver prices to fall. The stronger dollar also dented the sentiment. The firmer dollar weighs on dollar-denominated commodities such as gold, silver, and copper. The hopes about the improvement of infrastructural spending and betterment of inflation under Trump’s presidency have been strengthening the dollar.

Improved US economic data strengthens the dollar

On the other hand, better-than-expected jobless claims data and improved US consumer sentiment data also supported the US dollar. According to the data released by the Department of Labor on November 10, the initial jobless claims reached 254,000 by falling 11,000 in the week ending on November 5—better than the market’s expectation of a fall of 5,000 to 260,000. US consumer sentiment also increased more than expected and reached a five-month high. According to the data released on November 11, the consumer sentiment for October rose to 91.6—the highest reading since June 2016.

On November 11, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) fell 6.1%, 8.9%, 10.5%, and 9.2%, respectively. The SPDR Gold Trust ETF (GLD) fell 2.2%.

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