Gold Prices Rise as Dollar Rally Pauses Post Trump Election Win
Gold prices in Asian trade rose on Wednesday, recovering from recent losses as the dollar rally paused following Donald Trump’s election win. The market is now awaiting inflation data that could impact interest rates.
Spot gold rose 0.5% to $2,609.90 an ounce, while gold futures for December fell 0.4% to $2,615.70 an ounce.
Gold Stabilizes as Inflation Data Comes into Focus
The yellow metal has stabilized after recent losses, with investors now looking towards upcoming inflation data for clues on interest rates. Expectations are that inflation remained steady in October, which could affect Federal Reserve policies.
Trump’s election win has raised uncertainty over inflation outlook, with expectations of more expansionary policies leading to concerns about increased inflation and interest rates.
Other precious metals also saw gains on Wednesday, with silver rising 0.7% to $960.10 an ounce, and platinum up 1.1% to $31.108 an ounce.
Rate Anxiety Continues with Warning from Minneapolis Fed President
Minneapolis Fed President Neel Kashkari’s warning about potential inflation increases causing the Fed to pause rate cuts has added to uncertainty. The central bank has already cut rates by 75 basis points in the past two months, with expectations of another 25 bps cut in December.
Traders have slightly adjusted their bets on a December rate cut following Kashkari’s comments, with more Fed officials set to speak this week, including Powell on Thursday.
Copper Prices Fall Amid China’s Fiscal Measures
Copper prices fell slightly on Wednesday, with recent losses attributed to China’s new fiscal measures falling short of expectations. Benchmark copper on the London Metal Exchange fell 0.1% to $9,137.50 a ton, while December futures dropped 0.2% to $4.1390 a pound.
China’s approval of a 10 trillion yuan debt package to support local governments did not provide the targeted support for consumption and the property market that traders were hoping for. Analysts suggest Beijing is waiting for more clarity on Trump’s presidency before implementing further fiscal measures, as Trump has threatened steep import tariffs on China.