On Friday, gold prices drop to two and a half week lows, affected by a stronger greenback and as worries surrounding Donald Trump’s policy decisions started to decrease.
The greenback inched higher compared to other major currencies on Friday, during the fresh optimism over the viewpoint of the U.S. economy and as new policy plans by U.S. President Donald Trump gave support to the dollar.
The U.S. dollar index, which gauges the greenback’s strong point against a trade-weighted basket of six major currencies, increased 0.20% at 100.72, off the prior session’s seven-week low of 99.77.
On the Comex division of the NYMEX, delivery of gold futures for February declined 0.64% at $1,182.85, the lowest since January 11.
The February deal ended Thursday’s session 0.67% lower at $1,189.80 an ounce.
Futures were expected to find support at $1,156.30, the low from January 4 and resistance at $1,202.80, Wednesday’s peak.
As sentiment on the dollar developed, demand for gold destabilized after Trump recommended the implementation of a 20% tax on Mexican goods to pay for a border wall.
The statements came after the U.S. President ordered on Thursday the building of a U.S.-Mexican border wall and penalty for cities protecting illegal immigrants.
“Donald Trump was also planning ‘extreme vetting’ of visa applications and a temporary ban on virtually all refugee admissions into the U.S.,” according to the reports.
Since the inauguration of Donald Trump last Friday, the dollar has been under heavy pressure amid concerns because of the lack of clarity on his economic policies and worries that his protectionist trade position could hit corporate profits and act as a drag on development.
On Additional News
Demand for the safe-haven precious metal also stayed under pressure since the Dow topped 20,000 for the first time on Wednesday during optimism over Trump’s policies and a solid round of corporate incomes.
Market players were also looking forward to U.S. economic progress data, along with reports on durable goods orders and consumer sentiment, scheduled later in the day.
In another place in metals trading, delivery of silver futures for March dropped 0.85% to $16.707 a troy ounce, while delivery of copper futures for March inched down 0.11% to $2.670 a pound.
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