Gold prices rose on Monday to their highest in two months as investors sought safer assets amid uncertainty around the economic policies of new US President Donald Trump and as the dollar declined against other major currencies.
Spot gold was up 0.64 percent at $1,217.26 per ounce by 0617 GMT. Earlier in the session, it hit $1,219.43, the highest since November 22. US gold futures climbed as much as 1 percent to $1,217. The dollar index, which measures the greenback against a basket of currencies, fell by 0.5 percent to 100.230.
Donald Trump, who took power as the 45th president of the United States on Friday, pledged to end the "American carnage" of social and economic woes in an inaugural address that was a populist and nationalist rallying cry, prompting investor concern about protectionist trade policies.
With the lack of a clear policy direction from Trump, the market movement is a sign that risk aversion is back on the table, OCBC analyst Barnabas Gan said. The market could witness volatility into the first 100 days of the Trump administration, he added.
Data from US Commodity Futures Trading Commission (CFTC) on Friday underscored investor's bullish gold views. The CFTC reported that speculators raised their net long positions during the week to January 17 in COMEX gold contracts for the second straight week.
Bank of America Merrill Lynch said last week that precious metal funds had their biggest inflow in five months, according to data through to last Wednesday. Bond funds also notched a fourth consecutive gain over the last week, as investors continued to hedge against the so-called "Trump trades" put on late last year that bet on stronger growth and rising inflation. Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.2 percent to 809.15 tonnes on Friday from 807.96 tonnes on Thursday.
Comments
Comments are closed for this article.