2016-11-16 13:07:41

Although yesterday the price of gold has grown, today, the pair XAU/USD is declining.

Yesterday’s rise in the price of gold was caused by the weakening in the USD and the rise in stock indices.

After the victory of Donald Trump at the presidential election gold has sharply declined against the rise in the USD, stock indices and other commodities.

The other precious metals, such as silver, platinum and palladium went up on Tuesday. Yesterday, the index WSJ fell by 0.14% after the six day rise, when the index has reached the annual highs.

Now, markets are waiting for the indication about the timing of the next interest rate hike. According to futures for the Fed rate probability of the rate hike in December is approximately 86%.

Economists believe that new President of the United States intends to pursue protectionist policy, which may increase the inflation. The market incorporates in prices fiscal stimulus measures, tax cuts for the companies and investment in infrastructure.

The data released late October showed that the US core inflation in Q3 reached two-year highs. Economic development plan in the USA will boost inflation, and therefore, will increase possibility of the rate hike, which will add pressure on gold.

The price of gold usually increases during uncertainty in the market, when the assets, such as government bonds, stock indexes and USD go down in price. In case of the interest rate hike gold cannot compete with the assets brining interest income and therefore the price of gold goes down.

It is likely that pressure on gold will continue.XAU/USD: Prices of precious metals are under pressure.  Fundamental analysis for 16/11/2016