Gold bars are seen at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna, Austria, yesterday.
London: Gold prices jumped nearly 5 percent yesterday. Prices cut gains to dip below $1,300 an ounce as wider markets stabilised after a conciliatory victory speech from Trump but remained 2 percent higher, leaving the metal on track for its biggest one-day rise since Britain’s shock vote to leave the European Union in June.
Spot gold vaulted to a six-week high of $1,337.40 an ounce, up nearly 5 percent, and was at $1,300.80 by 0930 GMT. US gold futures for December delivery were up $26.90 an ounce at $1,301.40, having peaked at $1,338.30.
Davis Hall, head of forex and precious metals at Indosuez, said gold’s retreat suggested upside for the precious metal was limited, but that gold could still benefit from a Trump victory as the longer-term implications emerged.
“I still think stocks are going to digest this over a 10-day period, and 10 days from now stocks will be lower than they are now,” he said. “If the S&P breaks 2,000, gold will be up $100.”
The US yield curve moved to its widest in six months, with investors now less certain that the Federal Reserve will raise US interest rates next month. Trump’s fiscal policies are seen increasing the country’s deficit, and so raising the cost of longer-term borrowing.
Amanda van Dyke, fund manager at Peterhouse Asset Management, said, “Gold is going to increase by 5-10 percent over the next few days ... the devaluation of the dollar will be correspondingly taken up by the gold price.”
“Right now there’s over an 80 percent consensus of a US rate rise in December,” she added. “That might change because of this.”
