Commodities: Gold surges after Trump's Healthcare Bill denied by Congress
Gold surged on Monday afternoon as traders rattled by US President Donald Trump's failure to get his Healthcare Bill passed in Congress on Friday sparked a rush away from the dollar to safe-haven assets such as the yellow metal.
Turning to metals, at 15:04 GMT, on Comex, gold was up 0.79% to $1261.6 an ounce, with silver up 2.01% to $18.11 an ounce and copper down 2.19% to 257.35 cents a pound.
"Gold prices have risen sharply on the back of the weakness of the US dollar," said Michael Hewson, chief market analyst at CMC Markets UK.
"All this talk of a reflation trade and multiple Fed rate rises are starting to lose momentum, at a time when optimism about a large scale fiscal stimulus is starting to diminish," he added.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said Trump's failed bid to repeal ObamaCare had left investors asking questions about what comes next.
"If he (Trump) can't steer his first major piece of legislation through Congress will he be able to implement the rest of his programme? Or so the argument goes."
Hyett and other market watchers said that concerns surround the potential answers to that query had sent safe-haven assets such as gold higher.
FXTM vice president of market research Jameel Ahmad said it was predictable that gold was an obvious beneficiary from the greenback's weakness.
"Traders will now be monitoring whether any additional moves towards risk-off from investors," he added.
Three-month industrial metals on London Metals Exchange were mixed. Tin dived 2.1%, and was followed by a 0.36% slip in copper. Aluminum added 0.28%, while zinc rose 0.6%.
Crude-oil futures were heavily lower. At about 15:04 GMT, Nymex-priced WTI crude was down 1.5% to $47.25 a barrel. Intercontinental Exchange-traded Brent was down 1.14% to $50.22 a barrel, and having held above $50.
This followed a joint committee of ministers from Opec and non-Opec oil producers agreeing on Sunday to review if a global pact to limit supplies should be extended by six months.
Traders, already nervous about the global glut of the black liquid, had been looking for a further production-cut pledge from the cartel at the Sunday meeting.
"For all Opec's bullishness about extending its output cap, the ability of US shale producers to offset that is likely to make it a much slower process in eroding the current inventory overhang," said Hewson in a statement.
"While some Opec producers have called for the output cap to be extended doubts remains as to whether they will be able to arrive at the necessary consensus to do so," he added.
Hewson also commented that oil-price pressure had been pressured down after another sharp rise in the US rig count last week.