Investing.com - Gold prices were sharply higher during North American morning trade on Monday, rising to the strongest level in about two months as the U.S. dollar sank amid uncertainty around the economic policies of new U.S. President Donald Trump.
Gold for February delivery on the Comex division of the New York Mercantile Exchange touched a session high of $1,219.40 a troy ounce, a level not seen since November 22.
It was last at $1,214.50 by 8:40AM ET (13:40GMT), up almost $10.00, or 0.8%.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down around 0.4% at 100.36 in early trade, after falling to 100.17 earlier, a level not seen since December 8.
The dollar sold off amid disappointment that U.S. President Donald Trump’s inauguration speech on Friday proved light on detail over his plans for economic stimulus.
Investors will be closely watching the first official Trump administration press briefing on Monday. President Trump is scheduled to appear at 1:30PM ET (18:30GMT).
Looking ahead, there is expected broad market caution as President Trump will likely start rolling out executive orders in coming days.
The U.S. President said Sunday he would start talks with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA). Additionally, Trump said he would pull the U.S. out of the Trans-Pacific Partnership (TPP).
Meanwhile, market participants will get back to the business of watching economic data for fresh indications on the health of the economy in the week ahead, with Friday's advanced reading for U.S. growth in the spotlight.
Besides the GDP report, this week's calendar also features U.S. data on existing home sales on Tuesday, initial jobless claims and new home sales on Thursday, followed by durable goods orders and revised consumer sentiment on Friday.
A recent string of solid data reinforced the view that the U.S. economy is sufficiently robust to warrant higher interest rates in the months ahead.
The Federal Reserve indicated last month that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.
However, traders remained unconvinced. Instead, markets are pricing in just two rate hikes during the course of this year, according to Investing.com’s Fed Rate Monitor Tool.
A delay in raising interest rates would be seen as positive for gold, a non-interest-bearing asset, and negative for the dollar.
Also on the Comex, silver futures for March delivery tacked on 16.1 cents, or about 1%, at $17.19 a troy ounce during morning hours in New York.
Meanwhile, platinum rallied 1.2% to $987.65, while palladium dipped 0.2% to $786.80 an ounce, pulling back from the strongest level since May 2015.
Elsewhere in metals trading, copper futures rose 0.7 cents, or about 0.3%, to $2.632 a pound.