By Anushree Mukherjee
(Reuters) – Gold prices hit a near three-week low on Wednesday with dollar holding strong as ‘Trump trades’ soared, while investors also kept a close tab on the upcoming Federal Reserve policy meeting.
Spot gold slipped 0.8% to $2,721.21 per ounce, as of 0923 GMT. Bullion hit a record high of $2,790.15 last Thursday.
U.S. gold futures lost 0.7% to $2,730.20.
Republican Donald Trump claimed victory in the 2024 presidential contest after Fox News projected that he had defeated Democrat Kamala Harris, which would cap a stunning political comeback four years after he left the White House.
The dollar hit a four-month high, making bullion more expensive for buyers holding other currencies. [USD/]
“Gold breaks lower, weighed down by continued dollar strength and risks that the Fed may slow its rate-cutting pace amid worries that inflation may re-ignite,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Gold is considered a hedge against inflation but higher interest rates reduce non-yielding bullion’s appeal.
The Fed’s two-day policy meeting ends on Thursday and markets broadly expect the Fed to announce a quarter-point rate cut after 50 bps reduction in September.
“If there’s a hint that another rate cut might happen in December, gold prices might stay steady and potentially move higher. Essentially, what is said about December will likely matter more than this week’s rate decision,” said Zain Vawda, market analyst at MarketPulse by OANDA.
On the physical front, Perth Mint reported a decline in gold sales for the month of October, while silver sales slipped to their lowest in four month.
Spot silver fell 1.4% to $32.19 per ounce. Platinum shed 1.2% to $987.43 and palladium was down 1.4% to $1,060.94. All three metals hit it’s lowest level in three-weeks.
(Reporting by Anushree Mukherjee in Bengaluru, Editing by Louise Heavens)
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