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.
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.
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.”