The Gold price has in early trading on Tuesday after the significant losses at the start of the week further yielded. The price moved further away from the record high reached at the end of October.
One cost on the London Stock Exchange troy ounce (about 31.1 grams) in the morning around $2,607 and therefore almost twelve dollars less than the evening before. The gold price thus continued its correction of the past few days.
Starker Dollar
Since the record high of around $2,790 on October 31st, the price has fallen by more than $180, or almost seven percent.
The price of gold is currently being weighed down by, among other things, the recent sharp rise in the dollar exchange rate. A stronger dollar makes gold more expensive for investors from other currency areas. This weighs on demand.
The price of gold came under severe pressure after Donald Trump’s victory in the US presidential election. Economists expect Trump’s policies to lead to higher inflation.
Therefore, the US Federal Reserve Bank is unlikely to cut interest rates as much as previously expected. This had supported the dollar and caused yields in the US bond market to rise. Higher interest rates also make gold less attractive because it does not generate any interest itself.