Gold inches lower on improved risk sentiment

The spot gold price inched lower during Asian trading hours on Friday November 11 as market risk sentiment improved in anticipation of infrastructure spending plans by president-elect Donald Trump.

The spot gold price was recently quoted at $1,257.40/1,257.80 per oz, down $3.15 on the previous close. Trade has ranged from $1,251.15 to $1,265.43 so far.

“From a fundamental point of view, we tend to remain positive toward gold principally because the Trump victory is likely to be associated with heightened uncertainty in 2017, making for a gold-friendly environment, in addition to elevated political risks in Europe,” Metal Bulletin Research analyst, Boris Mikanikrezai, said.

“Still, Trump’s spending plans could create a short-term wave of euphoria in the market, boosting risky assets and therefore reducing safe-haven bids, which would be negative for gold.”

Trump’s lead in the polls during the US presidential election on Tuesday had initially sent commodity prices and equity markets lower, and safe haven asset prices higher, though this was later reversed after Trump was confirmed to have won the presidency.

“Infrastructure spending looks to be at the forefront with tax cuts for both individuals and corporations on the agenda. Stocks and the dollar remain the key beneficiary [while] gold deflated…[on] subsequent realisation that Donald J. Trump might well work out,” Triland Metals said in a report late on Thursday.

“It’s highly likely the buffoonery seen in his pre-election wining speeches will [become] lesser and lesser and that some of [his] outlandish policies get reigned in or completely quashed.”

In other commodities, the Brent crude oil spot price fell 0.04% to $45.63 per barrel, and the Texas light sweet crude oil spot price fell 0.02% to $44.38 recently on Friday.

In data, US weekly unemployment claims between October 27 and November 3 came in at 254,000, better than the forecast of 267,000.

US data due later on Friday includes the preliminary UoM consumer sentiment and preliminary UoM inflation sentiment.

In currencies, the US dollar index fell 0.015% to 98.67 so far on Friday.

In equities, the Shanghai Composite rose 0.3% to 3,180.64 recently on Friday.

In the other precious metals, the spot silver price rose $0.133 to $18.46/18.495 per oz. Platinum at $965/971 per oz was down $4 while palladium decreased $1 to $687/693 per oz.

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