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General Market Commentary
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General Precious Metals
Gold price can't hold onto $1,200
Gold price can't hold onto $1,200
Gold advanced to a seven-week high on Thursday as the Donald Trump-inspired rally in equities begin to lose steam and the US dollar comes under renewed pressure.
Gold for delivery in February, the most active contract on the Comex market, hit a high of $1,207.20 an ounce in overnight trade, up nearly 1% from Wednesday's close and the highest on an intra-day basis since November 23. The metal paired those gains in afternoon trading in another day of huge volumes in New York dipping below the psychologically important $1,200 an ounce level.
Gold is now up nearly 5% year to date, while the Dow Jones blue chip index has managed less than half a percentage point gain in 2017
Gold is up more than $80 an ounce since hitting post-US election lows mid-December, but remains down some $130 from an initial but brief surge on election night as results showed a likely victory for Trump.
Gold bears have been making big bets that a Trump administration will lead to strong US economic expansion, higher interest rates and a stronger dollar. Higher interest rates boosts the value of the dollar and makes gold less attractive as an investment because the metal is not yield-producing and investors have to rely on price appreciation for returns.
But rising uncertainty about the impact of the president-elect's fiscal stimulus plans has seen the dollar take a beating this week and US stock markets retreat from their highs.
Gold is now up nearly 5% year to date, while the Dow Jones blue chip index has managed less than half a percentage point gain in 2017 and the S&P 500 index hasn't fared much better. The Nasdaq has been setting records this year, but gold has also outperformed the tech-laden index.
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