In the wake of the first US Presidential debate, gold prices are headed down, with markets belief about Hillary Clinton’s winning stance. What is next for Gold?
27 September, AtoZForex – The First US Presidential debate triggered a number of consequences in the market. The gold market is not exclusion, as gold prices headed down on Tuesday with the rebounding equity markets.
How did Gold react to the first US Presidential debate?
The investors’ preferences are shifted in the direction of riskier assets on the beliefs about Hillary Clinton winning the First Presidential debate against Donald Trump. Asian shares rallied, where the Mexican peso soared this Tuesday. Daniel Hynes, the analyst at ANZ, stated:
“Leading into this event (presidential debate), positioning in the gold market buying wasn’t aggressive in either direction, it was fairly neutral. I suspect the move subsequent to the first debate is going to be relatively muted.”
Spot gold was headed down 0.1 percent at $1,336.61 per ounce by 0727 GMT, cutting its six-day highs. As for the US gold futures, they were trading at $1,349.20 per ounce, down by 0.3 percent. The senior precious metals dealer at MKS PAMP Group, Alex Thorndike, has commented:
“Flows were overall fairly modest given the amount of coverage this debate had. Gold dipped as expected on the back of Clinton being seen as victorious.”
What is next for Gold?
A number of experts say that gold could be put under pressure in case of Trump’s presidency, as the US dollar was likely to be in a better position from the Trump’s attitude against low-interest rates. The chief analyst at Shandong Gold Group, Jiang Shu, has stated the following regarding the possibility of Republican Nominee’s presidency:
“In the long term, if Trump becomes U.S. president, its effect on the dollar would be positive… Trump has always criticized the Fed for easing the monetary policy.”
Additionally, there are concerns that gold could turn lower, as Federal Reserve comments are fueling the December rate hike conjecture. A rhetoric strengthening of Fed Chairwoman Janet Yellen’s hawkish stance might drag on the gold prices and drive the US dollar up.
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