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Gold rebounds on Trump policy uncertainty

PROSPECTING GOLD
AP

Gold edged higher on Tuesday, snapping a three-session losing streak, on uncertainty over the economic policies of U.S. President-elect Donald Trump.

Trump has vowed to boost domestic spending, which has the potential to stoke inflation and dent demand for non-yielding bullion, but the market is seeking more detail on his policies.

Spot gold was up 0.31 percent at $1,224.60 an ounce at 3:10 p.m. EDT. The metal had slipped to its lowest since June 3 at $1,211.08 an ounce on Monday.

U.S. gold futures for December settled at $1,224.50.

"Gold will have to wait and see on when Trump moves into the White House and what policies he will cancel," Natixis precious metals analyst Bernard Dahdah said.

Trump is due to officially take power in January with promises of rolling back a major trade agreement and cutting taxes.

"There have been lots of statements of U.S. policy, but we don't have details and we don't know what it looks like. That's fertile ground for gold," aid ETF Securities commodities strategist Martin Arnold.

Generally, investors pile into safe-haven assets such as gold in times of political and economic uncertainty.

Gold has shed nearly 9 percent from a Nov. 9 high of $1,337.40 after Trump's election victory, hurt by a stronger U.S. dollar and surging Treasury yields.

Dallas Fed President Robert Kaplan suggested on Monday the U.S. central bank was on track to raise rates soon.

Macquarie said it was bullish on gold in 2017 as it was supported by political and economic uncertainty. "It is difficult to know how Trump the President will differ from Trump the candidate, at the very least it suggests a prolonged period of uncertainty, which could have a negative knock-on impact on the global economy," the bank said in a note.


The dollar index was down 0.2 percent at 99.920, but remained within reach of its December 2015 peak of 100.51.

Among other precious metals, silver was up 0.9 percent at $17.02 per ounce. The metal touched its lowest since June 8 at $16.61 an ounce in its previous session.

Palladium was down 0.2 percent at $696.80 an ounce. The metal hit a high of $702.50 earlier in the session, its highest since Oct. 4.

Platinum was up 0.65 percent at $936.75 an ounce, bouncing off over 8-month lows of $917.50 touched in the previous session.