• Gold weakens as a result of a stronger US Dollar on Monday. 
• President-elect Donald Trump’s Dollar positive policies and competition from Bitcoin are factors pressuring Gold. 
• Rumors Trump has offered known protectionist Robert Lighthizer the job of chief of trade is also weighing. 

Gold (XAU/USD) in fall continues to fall, trading in the $2,660s – nearly $25 down from last week’s close. A stronger US Dollar (USD) is mainly to blame, with the trade-weighted US Dollar Index (DXY) up almost half a percent so far on the day. Perceptions that President-elect Donald Trump’s economic policies will be positive for the Greenback are the main driver. Since Gold is mainly priced and traded in USD, a stronger Dollar causes its price to fall.

Trump’s love of what he described as “the most beautiful word in the dictionary” (tariff) is expected to increase the prices of goods and inflation. Whilst this alone is not US Dollar positive, it will make the US Federal Reserve (Fed) slow down the rate at which it cuts interest rates. Relatively elevated interest rates attract greater foreign capital inflows, which is, in turn, positive for USD. Trump’s penchant for lower taxes is also likely to stoke inflation further, compounding the effect.