Gold Prices Move Down Below $2,700 as US Dollar Strengthens
Gold prices (XAU/USD) traded in the negative territory near $2,680 during the early Asian session on Monday (11/11). The decline in the precious metal was pressured by a stronger US Dollar (USD) due to Donald Trump’s victory.
Meanwhile, the US Dollar Index (DXY), a measure of the value of the USD against a basket of six major currencies, extended its gains to around 105.00, the highest in four months.
Trump’s victory has raised questions about whether the US Federal Reserve (Fed) will continue to cut interest rates at a slower and smaller pace. This, in turn, boosted the Greenback and weighed on the USD-denominated Gold prices.
“The rise in the dollar and yields has put pressure on gold, which traditionally falls as real interest rates rise, reflecting reduced demand for safe-haven assets in the short term,” said Matthew Jones, precious metals analyst at London-based metals trader Solomon Global. "However, from a long-term macro perspective, the future is 'as good as it gets for gold,'" Jones added.
On the other hand, global economic uncertainty and ongoing geopolitical tensions in the Middle East may help limit losses for the yellow metal.
Source: FXStreet
