Gold price breaks above $1,200/oz as dollar sinks

The gold price broke above the key psychological $1,200 per oz level for the first time since November on the morning of Thursday January 12 in London amid a weakening dollar following a disappointing press conference by US president-elect Donald Trump on Wednesday.

The spot gold price was recently quoted at 1,203.65/1,203.95 per oz, up $10.15 on the previous close. Trade has ranged from $1,192.90 to $1,207.00 so far.

“Precious metals prices are stronger this morning, with spot gold prices recapturing $1,200 per oz – we have seen the run-up in gold prices as being driven by a fresh safe-haven buying ahead of the geopolitical uncertainty that the changeover of US presidents brings,” Metal Bulletin analyst William Adams said.

Trump’s comments during his first press conference since winning the US presidential election in November did little to instil confidence in his leadership abilities, instead fuelling greater market uncertainty, which subsequently saw the dollar slide. Gold and crude oil prices meanwhile edged higher.

“Gold will remain finely tuned to political comments and developments from Trump and his team,” HSBC analyst James Steel said.

“If the economic nationalists, who want to impose tariffs and increase infrastructure spending, have greater influence, we believe gold will likely trade higher. If the economic conservatives on Mr Trump’s team, who are more aligned to cutting taxes, cutting spending, and deregulation, are more influential, then gold may not do as well,” he added.

Silver, PGMs up

• In other precious metals, the spot silver price was up almost 20 cents at $16.895/16.945 per oz.

• Platinum was at $986/991 per oz, up $17, and palladium climbed $5 to $754/759 per oz.

• “Silver and platinum are following gold’s lead, while palladium prices, which have been showing independent strength, are consolidating ahead of November’s highs,” Adams said.

Currency moves and data releases

• The dollar index stood at 101.05 as of 10:00 London time, down 0.54% on the last session’s close. The dollar closed down at 101.61 yesterday.

• Despite market expectations, Trump failed to deliver much awaited details regarding his massive stimulus plan.

(Editing by Wei Jun Lau)

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