Gold on Friday fell to its lowest level since late May as the dollar surged to its highest in more than 13-1/2 years on expectations for a U.S. rate hike next month and higher fiscal spending from U.S. President-elect Donald Trump's incoming administration.
Today, spot gold was unchanged at $1,208.74 an ounce by 0030 GMT. In the previous session, the metal fell 0.63 percent to mark its lowest since May 30 at $1,203.52.
The dollar was on track for its best fortnight since 1988 against the yen, and hit its highest level since early 2003 against a basket of currencies, as Trump's win stoked talk of tax cuts and fresh investment in infrastructure to boost the U.S. economy.
There will be two major themes continuing in the marketplace when trading begins next week: a surging U.S. dollar and slumping world bond market prices. It’s also a holiday-shortened trading week for the U.S. next week, as the Thanksgiving holiday is Thursday. Next Friday is typically one of the lowest-volume U.S. trading days of the year.
Wall Street and Main Street are divided on whether the U.S. dollar will come to gold's rescue or plague the precious metal further next week, according to the weekly Kitco News gold survey.
Eighteen analysts and traders took part in this week’s Wall Street survey, and they were split right down the middle – nine each – on whether gold would bounce or continue to slide over the next week. Of those who offered comments, nearly all listed their short-term expectations for the U.S. dollar as the key factor on where gold is headed. A weaker greenback tends to support gold, prompting buying as sort of an alternative currency and because all commodities become cheaper in other currencies, and vice-versa.
Meanwhile, 689 Main Street participants submitted votes in either an online or Twitter survey. A total of 301 respondents, or 44%, said they were bullish for the week ahead, while 271, or 39%, were bearish. The neutral votes totaled 113, or 16%.
Reference: Kitco, Reuters
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