Gold hits 3-1/2-month high as 'Trumpflation trade' fades | Reuters

By Maytaal Angel | LONDON LONDON Gold hit its highest in 3-1/2 months on Friday as the dollar hit a one week low after the new U.S. finance chief poured cold water on the 'Trumpflation trade' that had boosted the greenback this year.Treasury Secretary Steven Mnuchin said on Thursday that any steps U.S.

Reuters February 24, 2017 23:15:06 IST
Gold hits 3-1/2-month high as 'Trumpflation trade' fades
| Reuters

Gold hits 312month high as Trumpflation trade fades
 Reuters

By Maytaal Angel
| LONDON

LONDON Gold hit its highest in 3-1/2 months on Friday as the dollar hit a one week low after the new U.S. finance chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year.Treasury Secretary Steven Mnuchin said on Thursday that any steps U.S. President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August.The comments suggested much work was still needed on the sweeping tax plan that Mnuchin called his main priority, and which investors had bet would stoke growth and inflation this year."We've got a vacuum of (U.S. domestic) policy, real (interest) rates going down, the dollar going sideways and geopolitical (jitters) around the world ... all helping gold," ICBC Standard Bank analyst Tom Kendall said."There is apparently a move of institutional investor money into gold and there are usually very good reasons for that."

Spot gold had risen 0.29 percent to $1,253.53 per ounce by 1445 GMT, having touched its highest since Nov. 11 at $1,260.10 earlier, zeroing in on the 200-day moving average. U.S. gold futures rose 0.24 percent to $1,254.40.Tempering gains in bullion, a poll on Friday suggested French presidential candidate Emmanuel Macron would beat far-right leader Marine Le Pen, who has promised a referendum on European Union membership.

Still, the precious metal was supported by tempered expectations of a U.S. rate hike in March after minutes from the Federal Reserve's latest policy meeting struck a less hawkish note than expected.Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced."Even in the event of a rate increase, we doubt the precious metal will lose much ground ahead of the key presidential elections in France in April, coupled with the Washington gridlock that seems to be calcifying," INTL FCStone analyst Edward Meir said.

Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, have risen more than 5 percent this month on geopolitical risk.Silver rose 0.53 percent to $18.26 per ounce, having touched its highest in 3-1/2-months at $18.40. Silver has gained about 1.5 percent this week in what could be its ninth straight weekly gain.Platinum rose 1.24 percent to $1,018.50 per ounce, having earlier hit its highest since early October at $1,028.60; while palladium gained 0.97 percent to $781.25. (Additional reporting by Arpan Varghese and N R Sethuraman in Bengaluru; Editing by Dale Hudson and Susan Fenton)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

also read

Goods train runs over two persons crossing railway line in Mathura
India

Goods train runs over two persons crossing railway line in Mathura

Both were trying to free their motorcycle from the rail track when the accident occured, SP (City) Martand Prakash Singh said

Cryptocurrency prices tumble and exchange trading falters as snags crop up
News & Analysis

Cryptocurrency prices tumble and exchange trading falters as snags crop up

NEW YORK (Reuters) -The price of cryptocurrencies plunged and crypto trading was delayed on Tuesday, a day in which El Salvador ran into snags as the first country to adopt bitcoin as legal tender. Shares of blockchain-related firms also fell as crypto stocks were hit by trading platform outages. But the major focus was on El Salvador, where the government had to temporarily unplug a digital wallet to cope with demand.

Ford poaches Apple's car project chief Doug Field
News & Analysis

Ford poaches Apple's car project chief Doug Field

By Joseph White and Sanjana Shivdas (Reuters) -The head of Apple Inc's car project, Doug Field, is going to work for Ford Motor Co to lead the automaker's advanced technology and embedded systems efforts, a hiring coup for Ford Chief Executive Jim Farley.