Morning Snapshot: Gold surges to 8-week highs
USAGOLD/Peter A. Grant/01-17-17
Gold continues to charge higher, buoyed larger by renewed weakness in the dollar. The yellow metal has pushed to a new 8-week high of 1218.90. Silver has reclaimed the 17-handle.
In a Wall Street Journal interview, President-elect Trump said the dollar was “too strong,” adversely impacting the ability of U.S. companies to compete globally. Mr. Trump seemed to be particularly concerned about the Chinese yuan “dropping like a rock.” Unvarnished rhetoric like that ought to strike fear in the hearts of dollar bulls and monetary policy hawks alike.
Easier policy is a sure-fire way to knock the dollar lower. There are two vacant seats on the Federal Reserve Board of Governors that President Trump will be able to fill immediately and they will presumably contribute to the shaping of monetary policy moving forward.
The dollar was further weighed by a rebound in the British Pound in the wake of Theresa May’s Brexit speech. While there will apparently be a hard-Brexit, assurances that Britain was not turning inward and that Parliament will get to vote on any deal struck with the EU seemed to temper pessimism somewhat.