Gold poised for biggest weekly fall in over five months on dollar strength
Bullion down 1.6% for the week
Fed cuts interest rate by 25 bps on Thursday
Election results to have no "near-term" impact on monetary policy, Powell says
Silver, platinum and palladium head for weekly decline
Recasts as of 1450 GMT
By Anjana Anil
Nov 8 (Reuters) -Gold prices dropped on Friday, poised for their steepest weekly decline in over five months, pressured by a stronger dollar and as markets absorbed the implications of Donald Trump's victory and its potential impact on U.S. interest rate expectations.
Spot gold XAU= fell 0.6% to $2,690.62 per ounce as of 9:50 a.m. ET (1450 GMT), and was down 1.6% for the week.
U.S. gold futures GCv1 shed 0.3% to $2,697.90.
The dollar index .DXY gained 0.3%, on track for a weekly gain. USD/
"In the last month, the story has been the uncertainty risk of the election and if there was going to be normalisation of transition, but this election appeared to be very decisive on the White House," said Alex Ebkarian, chief operating officer at Allegiance Gold.
"A lot of risk-on assets started benefiting in terms of the potential future implication of policies, so we had money go out of metals into these alternatives."
The Federal Reserve on Thursday cut interest rates by 25 basis points, but indicated a cautious approach to further cuts.
Trump's victory has fuelled questions about whether the Fed may proceed to cut rates at a slower and smaller pace, given the former president's tariff policy.
However, Fed Chair Jerome Powell said the election results would have no "near-term" impact on monetary policy.
The prospect of rate cuts, starting with the half basis point reduction in September, has underpinned gold's record rally this year.
Although bullion is reputed as a hedge against inflation, higher interest rates reduce non-yielding gold's appeal.
"Should markets restore the odds for a pre-Christmas Fed rate cut...that should help keep spot gold above the psychological $2700 level," Exinity Group Chief Market Analyst Han Tan said.
On thephysical front, gold demand in India faltered, while Japan and Singapore saw some buying. GOL/AS
Spot silver XAG= fell 1.3% to $31.58 per ounce, platinum XPT= fell 1.8% to $979.15, palladium XPD= shed 2.3% to $1,001.25. All three metals were heading for weekly declines.
Reporting by Anjana Anil and Anushree Mukherjee in Bengaluru; Editing by Daren Butler
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
