Trump's victory splits the gold market

Trump's victory splits the gold market

Gold investors in Europe and the US have reacted in different ways to Donald Trump's election victory.

Bullion dealers in Europe say there has been an increase in the amount of physical gold they are selling.

But that's not the case in the US, where volumes are down and the gold price has fallen to a nine-month low.

Gold fell 1.8 percent to US$1189 on Tuesday, New York time (Wednesday, New Zealand time).

It's now fallen 10 percent from its peak in the first few hours after it became clear that Mr Trump had won the election.

Gold initially leapt around 5 percent on the US market, before quickly giving up those gains. It has continued to fall since then.

Today's slide followed the release of data showing US durable goods orders rose 4.8 percent in October. That was well ahead of market expectations of a 1.5 percent increase.

The US dollar has been rising in expectation of higher interest rates. As the US dollar has gained strength it has hurt the gold price.

The fall in gold also shows that many US investors are taking more optimistic view of Mr Trump than their European counterparts.

Some US investors have been buying stocks, helping the four major share indexes on Wall Street hit new highs this week.

However, over in Europe many investors are not quite as optimistic. Many European gold buyers are concerned that a Trump presidency will be bad for international relations and global trade.

They are also worried about Brexit, the state of many of the European banks, as well as the political situation in countries like France.

The New Zealand gold price is impacted by the movement of the local currency against the US dollar. The local gold price has fallen just over 3 percent in 30 days, sitting at NZ$1720 per ounce.

The New Zealand dollar is trading at 70.07 US cents.