Gold price rebounds on Trump policy uncertainty
London (Nov 15) Gold edged higher on Tuesday, snapping a three-session losing streak, on uncertainty over the economic policies of U.S. President-elect Donald Trump.
Trump has vowed to boost domestic spending, which has the potential to stoke inflation and dent demand for non-yielding bullion, but the market is seeking more detail on his policies.
Spot gold added 0.6 percent to $1,227.16 an ounce by 1148 GMT, having slipped on Monday to its lowest since June 3 at $1,211.08.
U.S. gold futures climbed 0.4 percent to $1,227.
"Gold is taking back some of the negativity that we have seen over the past week. Although investors are becoming more risk-on, there is still a lot of uncertainty surrounding economic policy in the United States," said ETF Securities commodities strategist Martin Arnold.
"There have been lots of statements of U.S. policy, but we don't have details and we don't know what it looks like. That's fertile ground for gold."
Generally, investors pile into safe-haven assets such as gold in times of political and economic uncertainty.
Gold has shed nearly 9 percent from a Nov. 9 high of $1,337.40 after Trump's election victory, hurt by a stronger U.S. dollar and surging Treasury yields.
Though gold edged higher on Tuesday, ETF Securities' Arnold says that gains are likely to be shortlived, given the "very high probability" of the U.S. Fed raising interest rates in December.
Dallas Fed President Robert Kaplan suggested on Monday that the U.S. central bank is on track to raise rates soon. Also boosting gold was a near-5 percent fall in the dollar index , reflecting weakness that reduces the opportunity cost of gold for buyers with other currencies. The index, which measures the greenback against six other leading currencies, dropped from 11-month highs to 99.663. Among other precious metals, silver was up 0.8 percent at $17 an ounce, having touched its lowest since June 8 at $16.61 in the previous session.
Platinum rose 0.9 percent to $939.24, bouncing back from the more than eight-month low of $917.50 touched on Monday.
Palladium gained 0.9 percent to $704.50, having earlier hit its highest since Oct. 4 at $706.70.
Source: Reuters
