By Sherin Elizabeth Varghese
(Reuters) – Gold prices gained on Friday, boosted by a drop in dollar and persistent geopolitical tensions, but bullion was still set for its worst monthly loss since September last year after a post-election sell-off driven by Donald Trump’s win.
Spot gold climbed 0.5% to $2,652.71 per ounce, as of 01:40 p.m. ET (1840 GMT), but was set for a weekly fall of over 2% after a sharp decline earlier this week. U.S. gold futures settled 0.6% higher at $2,681.
Gold has dropped 3% so far this month, its worst monthly slide since September 2023, as “Trump euphoria” lifted the dollar earlier this month and stalled gold’s rally, triggering a post-election sell-off.
The dollar index fell to its lowest in over two weeks, but remains on track for a 2% rise in November as Trump’s Nov. 5 win fuelled expectations of big fiscal spending, higher tariffs and tighter borders. [USD/]
Gold, buoyed by geopolitical tensions and Federal Reserve interest rate cuts this year, now faces pressure as higher tariffs could stoke inflation and lead the Fed to adopt a cautious approach to further rate cuts.
It’s uncertain as of now, how Trump’s pledged tariffs will play out, said Jim Wyckoff, a senior market analyst at Kitco Metals.
However, “the uncertainty of the matter, the tariffs that could prompt a slowdown in economic growth could actually be beneficial for the gold market from a safe-haven basis.”
Bullion is traditionally seen as a safe investment during economic, geopolitical uncertainties and tends to thrive in a lower interest rate environment.
“Persistent global uncertainties continue to drive demand for gold as a safe-haven asset,” Ole Hansen, head of commodity strategy at Saxo Bank, said in a note.
On Thursday, Israel’s military reported suspects in southern Lebanon, calling it a ceasefire breach with Hezbollah, while Russia launched its second major attack on Ukraine’s energy infrastructure this month.
Spot silver added 0.9% to $30.54 per ounce, platinum gained 1.7% to $946.83 and palladium rose 0.7% to $981.63, although they were all set for monthly losses.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mohammed Safi Shamsi)
Add Comment