London - After a volatile day of record trading, gold prices steadied. Silver advanced for a third day as Donald Trump pledged to boost US infrastructure spending.
Bullion for immediate delivery added 0.3 percent to $1 281.68 an ounce as of 12:14 p.m. in London. Prices rose as much as 4.8 percent on Wednesday as markets reacted to Trump’s surprise victory in the U.S. presidential election. Silver increased 1.6 percent to $18.79 an ounce.
“The bid seems to be losing a bit of momentum again,” Ole Hansen, head of commodity strategy at Saxo Bank in Hellerup, Denmark, said by phone. “People are trying to work out what this means, and while that is happening, we’re seeing good action from both buyers and sellers.”
Republican control of Congress and the presidency sets the scene for a revamp financial rules that include rewriting US trade relationships and peeling back business regulations. Trump has signaled spending of more than $500 billion to rebuild US infrastructure, sparking a rally in industrial metals and mining companies.
Volume on the Comex in New York was 64 percent above the 100-day average for the time of day. On Wednesday, a record 869 000 contracts changed hands, according to data compiled by Bloomberg.
Market turmoil stemming from Trump’s unexpected victory may cause the Federal Reserve to delay raising rates, according to a bulletin from BlackRock, the world’s largest money manager. That would benefit gold because it doesn’t pay interest.
The market-implied chance of a December rate hike by the Fed is 82 percent, compared with 76 percent at the end of last week, according to data compiled by Bloomberg.
“The market is still assessing the outcome, and that will continue to bring greater volatility,”’ Will Yun, a commodities analyst at Hyundai Futures, said by phone from Seoul.
BLOOMBERG