Photographer: Akos Stiller/Bloomberg

Gold Surges Above $1,200 as Details-Shy Trump Weighing on Dollar

Updated on
  • Traders remain uncertain on the president-elect’s policies
  • Metal is up about 4% this year on demand for haven assets

Gold futures rallied to a seven-week high as investors flooded back into funds backed by the metal and the dollar declined in the aftermath of Donald Trump’s press conference that provided little detail on his economic stimulus plans.

The metal on Thursday rose above $1,200 an ounce for the first time since late November as exchange-traded holdings jumped by the most since the day after the election. The U.S. currency fell against most of its major peers, dropping 0.8 percent against the Japanese yen.

Gold has risen more than 4 percent this year, bolstered by a weaker greenback that’s spurring demand for the metal as an alternative asset. The president-elect on Wednesday left investors with few specifics on the timing and scope of planned policies from infrastructure spending to trade pacts, and fueled a drop in stocks after saying he would force drug companies to bid for the government’s business.

“The long dollar trade is pretty crowded and Trump invoked more than a bit of hysteria in macro markets, so people are trying to figure out what that means for markets and for gold,” Brad Yates, trading head for Dallas-based Elemetal LLC, said by telephone. “It’s a good recipe for a gold rally.”

For a Bloomberg View column on Trump’s press conference, click here.

Gold futures for February delivery rose 0.3 percent to settle at $1,199.80 an ounce at 1:37 p.m. on the Comex in New York. It touched $1,207.20, the highest for a most-active contract since Nov. 23.

The Bloomberg Dollar Spot Index, which tracks the currency’s strength versus trading partners, dropped 0.5 percent. Holdings in exchange-traded funds backed by the metal rose 1.6 metric tons on Wednesday, the biggest jump since Nov. 9.

“Gold is rising as question marks emerge over the consensus view that Trump would be great for the dollar and great for stocks on a grand, unfunded building plan,” Adrian Ash, head of research at online gold trading site BullionVault, said by phone from London. “Traffic has been pretty much all one-way for us -- customers are buying.”

In other precious metals:

  • Silver futures for March delivery was little changed at $16.825 an ounce.
  • Platinum futures for April delivery rose 0.9 percent to $984.70 an ounce.
  • Palladium futures for March delivery climbed 1.5 percent to $765.25 an ounce.