Off the wire
• Number of visitors to Malta up by 21.8 pct in January  • U.S. stocks soar after Trump speech  • Belarus, Georgia agree to strengthen relations  • 11 killed in gang clash in southeast Mexico  • French president rejects Fillon's allegations of bias in justice system  • BiH confirms second bird flu case within month  • Slovakia, Hungary sign agreement on new electricity connections  • U.S. economy continues steady expansion with tightening labor market  • U.S. dollar climbs on Fed officials' comments  • Mexico, Canada, U.S. all need each other, says Mexican president  
You are here: 　 Home

Gold futures fall after Trump's speech to Congress

Xinhua, March 2, 2017 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday after U.S. President Donald Trump's speech to Congress.

The most active gold contract for April delivery fell 3.9 U.S. dollars, or 0.31 percent, to settle at 1,250.00 dollars per ounce.

The safe haven demand seen earlier in the week and during part of last week has been eliminated as U.S. equities surged on Wednesday after U.S. President Donald Trump said that he would cut both corporate and personal taxes for Americans.

This drove U.S. equities sharply higher. The U.S. Dow Jones Industrial Average rose by 337.90, or 1.62 percent as of 1905 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 further pressure as the U.S. Dollar Index rose by 0.34 percent as of 1905 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.

President Trump's speech has dramatically impacted expectations for a rate hike at the next Federal Open Market Committee (FOMC) meeting. Investors now believe the Fed may raise rates from 0.75 to 1.00 during the March 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 66 percent at the March meeting and 72 percent for the May meeting.

A report released by the Institute for Supply Management on Wednesday also put pressure on the precious metal as its ISM manufacturing index increased by 1.7 points to a 57.7 level, a figure which analysts note was both stronger-than-expected and also the highest rate of growth in this measure since August 2014. This, combined with the above factors, contributed to the pressure that was put on gold on Wednesday.

Silver for May delivery rose 2 cents, or 0.11 percent, to close at 18.489 dollars per ounce. Platinum for April delivery fell 12.1 dollars, or 1.17 percent, to close at 1,018.90 dollars per ounce. Endit