Gold prices slide for second week as traders assess Trump's impact on U.S. interest rates
Shafaq News/ Gold prices fell onFriday and were headed for a second straight weekly fall as traders assessedthe impact of Donald Trump's presidency and its implications for U.S. interestrates.
Spot gold fell 0.7% to $2,687.65 perounce as of 0645 GMT and has slid nearly 2% this week. Prices hit overthree-week lows on Wednesday in the aftermath of Trump's U.S. presidentialelection win, but rebounded by over 1% a day later.
The U.S. dollar index was set for aslight weekly gain after Trump's election victory. A stronger dollar makesbullion more expensive for overseas buyers.
"The gold market was waitingfor a trigger to prompt some liquidation. There is some kind of uncertainty onthe trajectory of U.S. rate cuts and that's why we are seeing this pullback ingold," said Soni Kumari, a commodity strategist at ANZ.
The Federal Reserve cut interestrates by 25 basis points on Thursday, as was expected, but indicated a carefuland measured approach to any further reductions. Chair Jerome Powell said thepresidential election results would have no "near-term" impact onmonetary policy.
Traders see a 71% chance of another25-bps cut in December.
Bullion is considered a hedgeagainst inflation, but higher rates raise the opportunity cost of holding thecommodity.
"During Trump's initial term inoffice, gold rallied, and his policies are unlikely to undergo significantchanges," said Hugo Pascal, a precious metals trader at InProved.
"Running a higher deficit,putting tariffs in place are both inflationary measures, which should bepositive for gold."
Elsewhere, Beijing concludes itsfive-day meeting of the Standing Committee of the National People's Congresslater in the day, which investors are closely watching for more details onstimulus measures.
Spot silver fell 1.39% to $31.55 perounce, platinum fell 0.95% to $987.75 and palladium shed 1.51% to $1,009.00.
(REUTERS)
