Gold price slips

LONDON. — Gold fell yesterday as the dollar’s buoyant start to the new year kept up the pressure on prices after the metal posted its biggest quarterly loss in more than three years.

The themes of late 2016 appeared to be persisting in the wider markets in the new year, with stock markets bouncing, while the dollar posted its biggest rise in two weeks.

Spot gold was down 0.3 percent at $1,148.30 an ounce at 1030 GMT, while U.S. gold futures for February delivery were down $2.80 an ounce at $1,148.90.

Gold fell sharply in the wake of Donald Trump’s victory in the U.S. presidential election in November, sliding more than 12 percent in the fourth quarter.

Trump’s victory boosted the dollar and sparked a sharp rally in bond yields, lifting the opportunity cost of holding non-yielding gold and blunting investors’ appetite for the metal.

“The market has carried the theme of higher dollar, yield and stocks into 2017 — a formidable challenge to gold,” Saxo Bank’s head of research Ole Hansen said. There were however some potential positives for gold, he added.

“We have plenty of event risks is month, with Donald Trump (taking office) on January 20 being the biggest,” he said. “With exposure cut dramatically, we may see the selling pressure from long liquidation fade, as most of the those adjustments would have been carried out before year-end.”

Hedge funds and money managers slashed their net long positions in COMEX gold to a near 11-month low and trimmed bullish bets in silver contracts in the week to 27 December.

A strong start to 2016 meant gold still managed to end last year with its first annual gain since 2012, of 8.5 percent. — Reuters