By Daksh Grover
(Reuters) – Gold prices eased on Friday but hovered around the $2,700 level, as traders assessed the impact of Donald Trump’s presidency and its implications for the U.S. interest rate outlook.
Spot gold fell 0.4% to $2,697.19 per ounce as of 0251 GMT and was headed for a weekly loss. However, prices rose more than 1% in the last session, bouncing from over a 3-week low.
U.S. gold futures were flat at $2,704.50, while the U.S. dollar index was set for a slight weekly gain after Trump’s election victory.
A stronger dollar makes bullion more expensive for overseas buyers. [USD/]
Gold prices are marginally pressured due to the market’s uncertainty over U.S. political and policy developments, said Kyle Rodda, financial market analyst at Capital.com.
The long-term uptrend stays strong for gold, supported by expected rate cuts and ongoing geopolitical tensions, Rodda added.
Bullion is considered a hedge during uncertainties and tends to thrive in a low-interest-rate environment.
At the end of its two-day policy meeting on Thursday, the Federal Reserve cut interest rates by 25 basis points as anticipated, but indicated a careful and measured approach to any future rate cuts.
Traders now see a 71% chance of another 25-bps cut in December, in what could be the third reduction this year.
In the long term, it still looks bullish for gold but in the short-term, if prices drop to $2,643, the next levels of support will be $2,620-$2,520, said Brian Lan, managing director at Singapore-based dealer GoldSilver Central.
Meanwhile, global physically-backed gold exchange-traded funds (ETFs) saw inflows for the sixth straight month in October, the World Gold Council (WGC) said.
Elsewhere, Beijing will wrap up a key five-day meeting later in the day, which investors are closely watching for more details on stimulus measures.
Spot silver fell 0.8% to $31.75 per ounce, platinum fell 0.2% to $994.80 and palladium shed 0.21% to $1,022.36.
(Reporting by Daksh Grover and Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu and Sumana Nandy)
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