NEW YORK: Gold prices slipped more than 2% on Monday, weighed down by the greenback’s continued rise and the broader implications of Donald Trump’s victory on fiscal policy and interest rate cuts.
Spot gold fell 2.3% to $2,666.48 per ounce, as of 10:12 a.m. ET (1511 GMT). US gold futures fell 2.42% to $2,629.40.
With the dollar index rising 0.5% to its highest level since early July, gold became less attractive to non-dollar buyers. Last week, the index surged more than 1.5% to 105.44 following the announcement of Trump’s victory in the US presidential election.
“The market’s attention has focused to the second-order effect since the red wave,” said Daniel Ghali, commodity strategist at TD Securities.
“The likelihood of tariffs being imposed relatively early on into Trump’s presidency and the resulting strong demand for dollar that is creating. Stronger dollar is weighing on gold prices for the first time in months because it’s also associated with increasing odds that the Federal Reserve might delay its easing cycle.”
Bullion logged its worst week in over five months following Trump’s election last Tuesday to a second four-year term. His victory poses new uncertainties for the US central bank as it continues to consider interest rate cuts now that inflation is nearing the Fed’s 2% target.
Source: Brecorder
