Gold consolidates near 5-month lows

The yellow metal trades steady, virtually unchanged on the day, as investors continue to assess the implications of Trump’s victory on US economy and the likelihood of a December rate hike by the Fed.

Gold has entered a consolidation phase over the last sessions after bottoming out at a 5 ½-month low of $1,211 an ounce on Monday. Gold lost more than 6% last week amid optimism that fiscal stimulus under a Trump administration will spur economic growth and inflation, which would lead to faster pace of monetary tightening.

Gold remains very sensitive to rate hike expectations, as they tend to lift the greenback and weigh on dollar-priced metals. Meanwhile, higher interest rates lift the opportunity cost of holding non-yielding assets such as gold.

At time of writing, the yellow metal us trading at $1,227 an ounce, little changed on Wednesday.  

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