On Thursday, the gold price inched higher. This happened after the U.S. House of Representatives voted to impeach President Donald Trump. As a result, this stoked worries of political uncertainty in the world’s largest economy.
In addition to that, the gold spot price rose 0.1% at $1,476.69 an ounce. Then, U.S. gold futures were up 0.1% to $1,480.70 an ounce.
Trump is the third U.S. president to be impeached as the Democratic-led House officially charged the U.S. president with abuse of power and obstruction of Congress in a historic step that would fuel partisan tensions across a deeply divided America. And cautious sentiment backed bullion, usually regarded as an alternative investment during times of political and financial uncertainty.
Daniel Hynes, an ANZ analyst, stated, “The impeachment is resulting in a slight increase of the uncertainties. And we’re seeing gold inch higher on the back of that.”
However, they mostly muted the reaction to the recent impeachment. Asian shares pulled back from its one-and-a-half-year peak. On the other hand, the U.S. dollar slightly moved back against a basket of currencies. As a result, it made gold cheaper for holders of other currencies.
Senior currency strategist Ilya Spivak stated if the U.S. Senate convicts, which would be expected, then that throws next year’s election in a very uncertain place.”
Gold prices will surely boost on risk aversion.
Capping more earnings in bullion, China’s finance ministry showed the latest list of six products from the United States exempted from tariffs. This will begin on December 26.
After that, on Wednesday, two U.S. Federal Reserve policymakers explained that the U.S. economy is still in good shape following three consecutive interest rate cuts this year. As of now, the Federal Reserve will keep the borrowing costs where they are.
More of Gold and Others
Furthermore, gold is highly fragile to any reduction in interest rates. This diminishes the opportunity cost of holding non-yielding bullion. SPDR Gold Trust, holdings of the largest gold-backed exchange trade worldwide, gained 0.3% to 883.29 tonnes on Wednesday.
Meanwhile, Palladium rose 0.4% to $1,930.18 an ounce. On Tuesday, the prices of the autocatalyst metal had reached an all-time peak of $1,998.43.
Soybean and Soya Oil
Elsewhere, soybean prices increased by Rs 18 to Rs 4,274 per quintal in futures market on Wednesday. Moreover, this was because traders made new positions on strong demand.
Then, on the National Commodity and Derivatives Exchange, soybean for December delivery rose by Rs 18 or 0.42 percent. It is recently at Rs 4,274 per quintal with an open interest of 310 slots.
According to a few analysts, bolstering of fresh positions by speculators on the back of higher demand mainly led to an increase in soybean prices.
Also, refined soya oil prices on Wednesday declined by 60 paise to Rs 880.2 per 10kg in futures trade. And this was due to speculators lessening holdings amid subdued demand at the spot market.
Refined soya oil for delivery on the National Commodity and Derivatives Exchange in December fell by 60 paise or 0.07 percent. It is recently at 880.2 per 10kg in 7,035 lots.
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