Gold continues to power higher, establishing a new 13-month high at 1357.50 before easing modestly intraday. A push through the 1375/15/1388.46 would put the yellow metal at levels last seen in 2013.
Today’s economic calendar is light with July wholesale sales and consumer credit. We’ll also hear FedSpeak from Philly Fed centrist Patrick Harker.
Saturday is the anniversary of the founding of the DPRK. North Korea likes to mark such milestones with demonstrations of their nuclear might, so there is speculation that there will be another missile test this weekend.
How the U.S. might respond to yet another provocation remains to be seen, but tensions are likely to remain high. President Trump has expressed some reticence about military action in recent days.
While the debt ceiling issue has been kicked down the road to December, Congress still needs to hammer out a budget before the end of the fiscal year. Failure to do so — or at least pass a CR — may result in a government shutdown.
The dollar continues to lose ground, plumbing levels last seen in January 2015 and with little support below the market. If the greenback continues to fall, gold should continue to march higher.
Markets seem on edge heading into the seasonally volatile fall period for all the aforementioned reasons, which is piquing interest in gold. There is room for the yellow metal appreciate further on safe-haven demand.