By Georgi Kantchev and Stephanie Yang
Gold prices fell to a five-month low on Monday, pressured by a stronger U.S. dollar in the aftermath of Donald Trump's victory in the U.S. presidential election.
Gold for December delivery was recently down 1% at $1,212.10 a troy ounce on the Comex division of the New York Mercantile Exchange, on track for its sixth day of losses.
The Wall Street Journal Dollar Index, which weighs the dollar against a basket of other currencies, was up 1% on Monday. A stronger dollar is bearish for gold, which is priced in the U.S. currency and becomes more expensive to foreign investors when the dollar rises."Gold is still facing considerable headwind: the U.S. dollar is continuing to appreciate," said analysts at Commerzbank.
Optimism over economic growth under the new administration has prompted investors to dump safe-haven assets such as gold, and buy riskier assets. Stocks have climbed to new highs in the days following the election, with the Dow Jones Industrial Average on track for a record close Monday.
"Metals continue to be caught in the euphoria of a new dawn in U.S. economic growth," said Peter Hug, global trading director at Kitco Metals, in a Monday note.
The prospect of the U.S. Federal Reserve increasing interest rates in December is also pressuring investor sentiment in gold, which doesn't bear interest so struggles to compete when rates rise.
Traders in the market for Fed-funds futures, derivatives used to bet on the timing of Fed interest-rate decisions, reflect an 81% probability of a rate rise by December, according to CME Group.
Write to Georgi Kantchev at firstname.lastname@example.org and Stephanie Yang at email@example.com
(END) Dow Jones Newswires
November 14, 2016 10:56 ET (15:56 GMT)
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