Gold gains slightly as dollar hovers around 14-year highs in Trump trade

Gold prices rose slightly on Wednesday, reversing earlier losses, as the US dollar edged slightly lower from 14-year highs it touched the previous day.
 
The dollar still hovered near the 14-year high against the euro, on the back of expectations of a rapid hike in US interest rates under the incoming Trump Administration.

Spot gold prices were up 0.2 per cent at $1,134.26 an ounce by 8.12am. It had fallen 0.6 per cent in the previous session.

US gold futures were 0.2% higher at $1,135.80 per ounce. The price of gold for February delivery settled lower on Tuesday, down 0.28 per cent, at $1139.60, largely on news of the retreating dollar.

The commodity rose $3.80, or 0.3 per cent, to $1,141.30 an ounce this morning, regaining some of the lustre it lost last week. Gold shed about 1.8 per cent for the week ending 16 December, and the gold futures contract's lowest settlement point last week was $1,129.80.

The dollar index, which rocketed to a 14-year-high last week, traded up less than 0.1 per cent, on morning trading.

The dollar index, which measures the greenback against a basket of currencies, was down 0.2 per cent at 103.110. The index touched 103.65 on Tuesday, its highest since December 2002.

In thin trading ahead of year-end holidays, the euro last stood at $1.0413 after slipping below $1.0352 on Tuesday, a level last seen in January 2003.

The weak euro helped to push the dollar's trade-weighted index against a basket of six major currencies to touch 103.65, also a 14-year high. The index was last at 103.30.

The dollar index has risen 5.8 per cent since Trump was elected boosted by his expansionary fiscal policy that investors expect to boost US growth, inflation and interest rates.

Trump has pledged big tax cuts and spending increases and threatened to impose tariffs on imports from China and Mexico.