After continued closure at its lowest for the past 5 months, Gold prices are now recovering some ground starting Monday November 14, 2016. The precious metal fell to a low of $1608.18 CAD per troy ounce at 5:15 that morning, and went on to make a rise of $1626.77 CAD per troy ounce by 8:45.
A strong dollar and widespread forecasts that the US Federal Reserve will plan on strengthening the cost of borrowing by December is what is raking the headlines today leading to last week’s total fall of the bullion’s last week.
Jeffrey Halley, senior market analyst at OANDA, told Reuters: “The rate hike in December is an absolute done deal now.”
Gold is now widely expected to make widespread gains after the recent US elections that led to the victory of Donald Trump as US President elect. With predictions of turbulent times ahead, there are forecasts of the bullion being a quick favorite for investors owing to its strength and its mark as a safe haven in turbulent times.
With indication of Trump’s win all over, prices of the gold metal rose to about $1005.63 USD ($1345.68 CAD) on November 16.
“What we’re seeing today is the continuation of long liquidation going through the market. People seem to have unwound their Trump-risk and are now talking more about ‘Trumpflation’, with Trump’s fiscal policies that he wants to enact with all this infrastructure that would push up inflation and that would push up borrowing rates and yields in the States”, states Halley.
Analysts are now hoping Mr. Trump’s election will lead to the cost of borrowing becoming faster than what had been anticipated earlier.
Rising interest rates in any economy signals a healthy economic development. Gold or bullion thereby takes a backseat and people opt for the riskier ventures that the yellow metal promises.