Gold above $1,200 for the first time since November as Trump economic policy vacuum pulls investors away from equities

 
Jasper Jolly
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Donald Trump's lack of economic policy proposals has pushed investors back towards gold (Source: Getty)

Gold prices continued their rally from mid-December lows as investors edged back from the Donald Trump reflation story.

Gold futures prices broke the $1,200 per troy ounce mark for the first time since late November, as the US dollar hit its lowest point for almost a month.

Gold usually moves in the opposite direction to the dollar, which hit 14-year highs during the post-election market euphoria.

Read more: Risk-filled 2017 drives gold investor sentiment to highest level since 2012

Gold – traditionally a safe-haven investment – fell steeply after the election of Trump, as investors moved their money into riskier equities. Trump was widely expected to pursue a de facto stimulus, with policies mentioned on the campaign trail including massive tax cuts and deregulation combined with a trillion-dollar spending spree.

However, more details of the economic policies – which would be unprecedented for a Republican President – have failed to emerge.

During a raucous press conference the US President-elect failed to mention fiscal policy, other than an aside on drug prices which stunned the pharmaceutical industry worldwide.

Read more: FTSE 100 gold miners lose their shine as prices slump to 10-month low

He also claimed he would “be the greatest jobs producer that God ever created”, despite government statistics showing – and the vast majority of economists believing – the US economy nearing full employment.

Trump gave no specific instances of how he would do this, but did mention the “trade imbalance” with China as a “disaster” for the US.

David Morrison, senior market strategist at Spread Co, said: “Mr Trump had nothing to say about tax cuts, reducing regulation or infrastructure spending. This omission led to a sharp sell-off in the US dollar and a corresponding bounce in precious metals.”

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