Gold rises above US$1,200 as Trump’s lack of direction weighs on US dollar


Sun, Jan 15, 2017 - Page 14

Gold futures rallied to a seven-week high as investors flooded back into funds backed by the metal and the US dollar declined in the aftermath of US president-elect Donald Trump’s news conference that provided little detail on his economic stimulus plans.

The metal on Thursday last week rose above US$1,200 an ounce for the first time since late November last year as exchange-traded holdings jumped by the most since the day after the election.

The US dolalr fell against most of its major peers, dropping 0.8 percent against the Japanese yen.

Gold has risen more than 4 percent this year, bolstered by a weaker US dollar that is spurring demand for the metal.

The US president-elect on Wednesday left investors with few specifics on the timing and scope of planned policies from infrastructure spending to trade pacts, and fueled a drop in stocks after saying he would force drug companies to bid for the government’s business.

“The long [US] dollar trade is pretty crowded and Trump invoked more than a bit of hysteria in macro markets, so people are trying to figure out what that means for markets and for gold,” Brad Yates, trading head for Dallas-based Elemetal LLC, said by telephone. “It’s a good recipe for a gold rally.”

On Friday, gold futures for February delivery rose 0.3 percent to settle at US$1,199.80 an ounce at 1:37pm on the Comex in New York. It touched US$1,207.20 during intraday trading, the highest for a most-active contract since Nov. 23 last year. The contract is up 1.6 percent from last week’s US$1,181.30 an ounce.

Holdings in exchange-traded funds backed by gold rose 1.6 tonnes on Wednesday last week, the biggest since Nov. 9 last year.

“Gold is rising as question marks emerge over the consensus view that Trump would be great for the [US] dollar and great for stocks on a grand, unfunded building plan,” Adrian Ash, head of research at online gold trading site BullionVault, said by telephone from London. “Traffic has been pretty much all one-way for us — customers are buying.”

Other precious metals:

Silver futures for March delivery was little changed at US$16.825 an ounce.

Platinum futures for April delivery rose 0.9 percent to US$984.70 an ounce.

Palladium futures for March delivery climbed 1.5 percent to US$765.25 an ounce.

Base metals:

Nickel fell 0.9 percent to US$10,185 a tonne in London, heading for a weekly decline after Indonesia said it would allow some exports of ore, easing a ban on unprocessed shipments.