Gold Prices Plunge 7% as Traders Back ‘Trump Boom’

Gold Prices Plunge 7% as Traders Back ‘Trump Boom’ by Adrian Ash

Gold prices rallied off 3-week lows in Asian and London trade Friday, bottoming over 7% below Wednesday’s US election results’ spike at $1251 per ounce as European stock markets ended their ‘Trump bump’ rally and fell with emerging-market equities.

Crude oil fell hard despite a drop in the US Dollar on the FX market.

Gold priced in British Pounds flirted with its post-Brexit shock floor at £990 per ounce as Sterling traded above $1.26, its best level in over a month against the Dollar.

Chart of the spot gold price in British Pounds. Source: BullionVault

Gold prices swung 2.5% versus China’s Yuan overnight in Shanghai, fixing at a 3-week low in the world’s No.1 miner and consumer nation.

The Shanghai Gold Exchange’s main contract saw what would have been record-high volume equal to 86 tonnes if not for Wednesday totaling two-thirds more as Trump’s US election win became clear.

Buyers in China “[have] increased demand,” Reuters quotes bullion bank HSBC’s analyst James Steel, “and if gold falls further we could see more price-sensitive buying come into the market.”

Western government bond prices also sank again Friday, driving 10-year US Treasury yields to 2016 highs above 2.15% and pushing 10-year German Bund yields up to 0.31% after they touched a record low minus 0.19% following the UK’s Brexit referendum shock in midsummer.

Copper prices meantime shot to $6,000 per ton – the highest level since mid-2015 – with a 1-week gain of 19%, the fastest on record, amid frantic trading in Shanghai and London.

Silver held a 1.5% gain for the week, defying its typically strong correlation with gold prices.

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