Gold Holds Near One-Month Low as Dollar Rallies After Trump Win

Gold held near a one-month low after tumbling on Monday as Donald Trump’s presidential win boosted the dollar further. 

Bullion was steady after sliding 2.5% in the previous session. A gauge of the dollar rose to its highest level in a year, with markets expecting more gains linked to Trump’s trade tariffs and solid US economic growth. A stronger greenback makes commodities priced in the currency more expensive for most buyers.

The precious metal has declined more than 4% since last week’s election, as hedge funds unwound bullish wagers and exchange-traded fund flows turned less supportive amid a widespread rotation into US equities. The sell-down is also “partly technical” after a break below the 50-day moving average led funds to cover long positions, according to Pepperstone Group Ltd. Head of Research Chris Weston. 

Bullion is still up more than 25% this year, supported by the Fed’s easing cycle, central bank purchases and heightened geopolitical and economic risks that drove haven demand.

Investors will look to Wednesday’s core consumer price index report, which excludes food and energy, for clues on the Federal Reserve’s easing path after the US central bank cut rates by 25 basis points last week. Many economists see the inflationary impact of Trump’s policies leading to fewer rate cuts than previously expected. Lower borrowing costs tend to benefit gold, which doesn’t pay interest.

Spot gold edged 0.2% higher to $2,623.74 an ounce as of 7:58 a.m. in Singapore, about 6% below a record high reached last month. The Bloomberg Dollar Spot Index was steady after rising 0.5% on Monday. Silver and palladium edged higher, while platinum slipped.

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