Gold eased on Wednesday as the dollar climbed to a 14-year high against a currency basket, extending a week-long rally driven by a surge in Treasury yields after Donald Trump's election to the US presidency. The metal has shed more than $100 an ounce from last Wednesday's post-election high on the back of the sharp rise in bond yields and burgeoning appetite for risk.
Spot gold was down 0.2 percent at $1,225.06 an ounce by 2:05 p.m. EST (1905 GMT), while US gold futures for December delivery settled down 0.05 percent at $1,223.90. "It's consolidating the Trump action here ... above $1,200," said Joe Foster, portfolio manager and strategist of VanEck International Investors Gold Fund in New York. "The dollar's a bit stronger today and gold's not changing much so that to me is a sign of base building and consolidation."
Major banks and investors have begun to debate the possibility of another move towards parity between the dollar and the euro, as the US currency benefited from expectations of an inflationary push from the incoming Trump administration. "Gold is trying to stabilize despite continued headwinds from rising real rates and a stronger dollar," Saxo Bank's head of commodity research Ole Hansen said. Silver was down 0.8 percent at $16.94 an ounce while platinum turned up 0.9 percent at $943.5. Palladium climbed by as much as 2.2 percent to a six-week high at $721.40.