Shafaq News/ Gold prices slipped to a near three-week low onWednesday, beating a retreat as the dollar jumped after Republican Donald Trumpwas elected US president in a remarkable political comeback.
Investors in gold were also turning their attention to thenext Federal Reserve policy meeting, seeking clues on the pace of interest ratecuts. The prospect of several rate cuts had been underpinning bullion'sstunning rally this year.
Spot gold was down 1.5% to $2,703.93 per ounce at 11:52 GMT.Bullion hit a record high of $2,790.15 last Thursday.
US gold futures were down 1.3% to $2,713.60.
The dollar hit a four-month high, making bullion moreexpensive for buyers holding other currencies, as traders bet the prospect ofhigher tariffs under Trump could keep interest rates higher for longer.
"Gold will be torn between the risk of risinginflation, potentially slowing the pace of US rate cuts, as tariffs are rolledout and continued demand for safe haven assets," said Ole Hansen, head ofcommodity strategy at Saxo Bank.
Gold is considered a hedge against inflation but higherinterest rates reduce non-yielding bullion's appeal.
Gold has done well in recent years under Republican andDemocrat administrations - spot gold rose by 54% during Trump's first term andhas gained around 50% so far under current President Joe Biden.
"Looking ahead, the big question for the gold market ishow different today’s version of President Trump will be from the one that wonthe election eight years ago," said Carsten Menke, an analyst at JuliusBaer.
The Fed's two-day policy meeting ends on Thursday andmarkets broadly expect the Fed to announce a quarter-point rate cut after a50-basis-point reduction in September.
"The FOMC will likely still cut on Thursday but thesubsequent language will be studied closely for signs of a pause," Hansenadded.
Commodities from oil to metals and grains slid on Wednesdayas the dollar strengthened.
Spot silver fell 2.6% to $31.80 per ounce. Platinum shed 2%to $979.65 and palladium was down 2.9% to $1,044.75. All three metals hit theirlowest level in three-weeks.
(Reuters)