Gold price slips as traders weigh outlook for Fed interest rate cuts
Bullion traded near $2,626 an ounce in thin trading after closing 1.1% higher on Friday.
Gold was coming under renewed pressure on Thursday with the most active futures contract on the Comex market in New York, hitting a low of $1,163.80 an ounce, levels not seen since the beginning of February this year.
With an 8% fall, November was the worst month for the metal since June 2013. Measured from the short-lived surge on election night November 8 when early results suggested a Trump victory, gold is down more than $170 an ounce.
Gold bears are making big bets that Trump’s plans for fiscal stimulus will lead to strong US economic expansion, higher interest rates and a stronger dollar prompting a move out of gold and gold mining stocks.
Higher interest rates boost the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing.
The dollar measured against a basket of the currencies of major US trading partners has surged since Trump’s victory hitting 14-year highs this week.
The devastation among the globe’s largest gold companies has been even more severe, with the likes of GoldFields and Sibanye Gold losing more than a fifth of their value in the three weeks since the election.
Losses were more moderate among some of the biggest caps, but no counter was spared with gold mining counters all suffering double digit losses with the exception of Russia’s Polyus Gold.
In total more than $15 billion in market value was wiped from the world’s 13 largest gold miners measured by output.
2 Comments
ExPat
Who needs gold when America will have a strong leader?
Daniel
Does Anybody have an idea what Trump will do next, himself Included?