Investors pulled $1 billion out of the SPDR Gold Trust, the world’s largest physically backed gold ETF, between November 4 and November 8. This marks the biggest weekly outflow in over two years. The shift in sentiment follows Donald Trump’s re-election victory.
Investors seem to be cashing out of the safe-haven asset, expecting a strong dollar under a second Trump term. Gold hit a record high of $2,789 per ounce at the end of October, a 35% year-to-date gain and the strongest performance since 1979. However, prices have recently fallen by 6%, making November the worst month for gold since September 2023.
Analysts suggest the decline in gold is largely a reaction to Trump’s economic policies.
Investors’ shift from gold ETFs
These include promises of tax cuts, deregulation, and proposed tariffs aimed at boosting domestic manufacturing and reducing dependency on foreign goods.
During Trump’s first term, overall economic growth averaged 3% annually. This has fueled expectations of a strong economy and a stronger U.S. dollar, impacting gold’s status as a safe-haven asset. Bitcoin, often called “digital gold,” has seen strong gains and hit fresh record highs recently.
Some analysts remain skeptical, labeling Bitcoin’s rise as speculative. Peter Schiff, a longtime gold advocate, posted on social media, “Bitcoin’s rise has nothing to do with its supposed fundamentals.” He attributes the shifts to a “Trump-inspired mania” and expects the strong dollar and anticipated economic growth will reduce the need for U.S. dollar alternatives. The significant outflow from the SPDR Gold Trust highlights the changing landscape of safe-haven investments as investors restructure their portfolios based on shifting economic policies and market expectations under Trump’s second term.
