Opinion with Peter Hug
Gold Pops On Trump Statement
Kitco Commentaries | Opinions, Ideas and Markets Talk
Featuring views and opinions written by market professionals, not staff journalists.
(Kitco News) - Gold was comfortable at the $1,278 level until Trump uttered his belief that the dollar was too strong. The comment triggered a drop in yields and the yen surged on the news. The comment pushed gold to our outside call of $1,288 that we suggested yesterday morning. The issue that remains is that there is more than one player at the card table. The EU and the Japan are fighting on the other side of the trade. Both blocs want weaker currencies to stimulate exports and both blocs have a zero interest rate policy, at a time when the Fed is looking to tighten. Talking the dollar down is one thing, but keeping it down with rate differentials where they are may be more problematic. It is not likely that gold will suffer a serious reversal today, due to the long weekend and continued tensions with North Korea, but the market is looking slightly ahead of itself. Watch for a break of $1,292 for a move to $1,300, with support at $1,279.