Gold Price Falls on Stronger Dollar
Gold lost value today (February 13) as the US dollar gained amid meetings between President Trump and Japan’s Prime Minister Shinzo Abe.
The dollar rose to its highest level this month, after the meeting, which did not discuss currency issues.
It has also been helped by Mr Trump’s announcement last week of tax reform, which the market considers likely to be tax cuts. The US President promised that he would make a statement that would be “phenomenal in terms of tax”.
Ole Hansen of Saxo Bank told Gulf News: “[The statement] helped send stocks, dollar and bond yields higher, thereby revising some of the support that earlier in the week helped send gold to a year-to-date gain of more than eight per cent.
“A correction was overdue after gold almost managed to recoup half of what had been lost during the [selloff]. Underlying demand has improved with hedge funds showing signs of returning. This after having cut net-long positions by 88 per cent from last July’s record up until early January.”
Jeffrey Halley, senior market analyst at OANDA, told Reuters: “Quietness on the protectionism front and a rekindling of the Trump-flation trade is taking the wind out of gold's safe-haven sails.”
But the wider picture is an expectation that the gold price will recover because of elections in Europe and continued concerns about Mr Trump’s policies. In addition, there were jittters in the market amid North Korea’s announcement it had successfully tested a new medium to long range missile.
Outlook for Gold Price Recovery
Hareesh V, research head at Geofin Comtrade Ltd, said: "Prices are likely to recover again, even though there may be slight corrections. Global uncertainty from the US, Europe and on the Korean front will drive global prices high again as prices couldn't break the December-low.”
Since December, gold has added almost 10 per cent to its value. It was valued at £982.93 per troy ounce at 09:15 today.
Keep an eye on the gold price movements with our live gold price tracker.
