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Gold down after election

Xinhua, November 10, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as traders digested the results of the U.S. presidential election.

The most active gold contract for December delivery fell 1 U.S. dollars, or 0.08 percent, to settle at 1,273.50 dollars per ounce.

U.S. presidential candidate Donald Trump became the U.S. president elect between the market's close on Tuesday and its reopening on Wednesday morning. Analysts note that despite an initial massive spike in gold and an enormous drop in U.S. equities options, the precious metal stabilized before the market opened and ended lower after the market's close.

The U.S. Dow Jones Industrial Average rose by 299 points, or 1.25 percent as of 1815 GMT. Analysts note that when equities post losses, the precious metal usually goes up, as investors are looking for a safe haven, while the opposite is true when U.S. equities post gains.

Gold was put under pressure as the U.S. Dollar Index rose by 0.6 percent to 98.55 as of 1815 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

There were no major economic reports released on Wednesday but Thursday will see the release of the weekly jobless claims, and the consumer sentiment report on Friday.

Traders are still weighing the possibility of a U.S. Federal Reserve rate hike in December. Investors believe the Fed may raise rates from 0.50 to 0.75 during that month's FOMC meeting. According to the CME Group's Fedwatch tool, the current implied probability of a hike from 0.50 to at least 0.75 is at 76 percent at the December meeting and 77 percent for the February meeting.

Silver for December delivery added 2.2 cents, or 0.12 percent, to close at 18.378 dollars per ounce. Platinum for January delivery dropped 5.3 dollars, or 0.53 percent, to close at 1,003.30 dollars per ounce. Enditem