| Gold prices on Wednesday added to gains made in the previous session as the U.S. dollar weakened, with investors showing concern over the impact of the potential economic policies of U.S. president-elect Donald Trump.
Spot gold was up 0.3 percent at $1,231.40 an ounce at 0357 GMT, after rising 0.67 percent in the previous session. U.S. gold futures rose 0.56 percent to $1,231.30. “At this moment there is some kind of rebound but $1,230 should be the immediate resistance level that it should not cross with a very high momentum,” said Mark To, head of research at Hong Kong’s Wing Fung Financial Group. “$1,215 to $1,250 should be the trading range just to allow some time for people to think and reflect on the possibilities of policy options for the President-elect.” Trump’s election to the U.S. presidency sent bond yields surging to 2016 highs this week, pushing the U.S. dollar to an 11-month peak against a basket of major currencies on Tuesday, as investors bet his administration’s policies would stoke inflation. On Wednesday, the dollar index, which measures the greenback against a basket of major currencies, slipped back 0.26 percent at 99.965. “A slightly weaker U.S. dollar also helped improve investor sentiment,” ANZ analysts said in a note. The dollar still held near its 11-month high hit, though, after upbeat U.S. data gave the greenback fresh impetus. Stronger-than-expected U.S. retail sales data in October pointed to sustained economic strength that could allow the Federal Reserve to raise interest rates next month. Fed Governor Daniel Tarullo on Tuesday said Trump’s election already may be pushing up interest rates and tightening financial markets, something the Fed will have to monitor as it decides how quickly to tighten monetary policy. Gold is highly sensitive to interest rates. Spot gold may test a resistance at $1,235 per ounce, Palladium was mostly unchanged at $706.20, after touching its best since Oct. 4 at $711.70 earlier in the day. Source: http://in.reuters.com |
