Column: Trump 2.0 won’t reverse Biden’s critical minerals push
Donald Trump has described the Inflation Reduction Act (IRA) as a "green scam" and vowed to repeal it after he returns to the White House in January.
Gold prices fell more than 1% on Monday as worries over a crisis in the banking sector subsided, prompting investors to scale back safe-haven trades in favour of riskier assets.
Spot gold dropped 1.2% to $1,953.36 per ounce by 12:30 p.m. ET, near its lowest in a week. US gold futures also lost 1.3.%, trading at $1,958.50 per ounce in New York.
[Click here for an interactive chart of gold prices]
“There is a sense of calm in the markets and a flight back into some of the risk-on assets, and all the safety trades like gold are starting to sell off,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, told Reuters.
A buyer for Silicon Valley Bank’s deposits and loans helped Wall Street’s main indexes open higher, sending gold further below the $2,000 mark breached last week.
“Much of the rally on the gold market was really short-covering,” Streible said, adding that prices were likely going to continue to come under pressure.
Recent banking sector stress and the possibility of a follow-on credit crunch bring the US closer to recession, Minneapolis Fed president Neel Kashkari said. However, central bank officials said there was no indication financial stress was worsening.
“After kissing the psychological $2,000 level last week, bears exploited this resistance to attack. Appetite for the precious metal has also been dampened by a stabilizing dollar and mixed signals on monetary policy from the Fed,” said Lukman Otunuga, senior research analyst at FXTM.
Last week, the US Federal Reserve indicated it was on the verge of pausing further increases in borrowing costs, boosting non-yielding gold’s appeal.
(With files from Reuters)
Read More: Sprott sees gold price hitting fresh record as banking crisis unfolds
