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Gold Resumes Downdraft

(Kitco News) - Gold weakness reasserted itself again in the face of a rising dollar overnight. With the Chinese New Year beginning, demand from the Far East was sluggish and the easiest path was lower. It may feel good -- the rah-rah of let’s put America first -- but some caution should be expressed about the aggressiveness of Trump’s tone. Slapping a 20% tariff on Mexican imports to pay for the wall is in essence a 20% tax on the American public. Americans will pay for the wall in higher cost of goods. It will hit the exact group that is Trump’s base. I digress. The mood remains buoyant in the US equity space and is beginning to feel like 1999 and although one can argue that valuations are extreme based on “today’s” reality, mood can push this market higher. Funds continue to divest away from gold. Short-term support rests at $1,178 (minor) and then $1,172. Would need a break above the $1,192 to scare the bears.

Peter Hug on Kitco Video News this week:


By Peter Hug, Kitco Metals Global Trading Director; phug@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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