Bitcoin up, gold down … why is gold plummeting?

Bitcoin is soaring while gold slumps. The thing about moves of this magnitude is there are always stories about for ‘why’ this is happening. A fancier term is narrative.

There are often multiple, sometimes even conflicting narratives.

Here’s my narrative for why gold is falling. The metal saw its biggest price drop in 3+ years:

• the strong post-election U.S. dollar is a factor

• political uncertainty had been supportive, but this has been been removed after the US election, a solid win for Trump

• Republican majority in Congress is expected, giving Trump a clearer path to push his agendas though

• Fed rate cuts, and more to come, are supportive for gold – but expectations of future cuts have been trimmed back somewhat

This article was written by Eamonn Sheridan at www.forexlive.com.