USAGOLD/Peter A. Grant/03-18-17
Gold slipped back into the range after failing to take-out the high for the year at 1263.87. The yellow metal is being weighed upon by rebounds in the dollar and stocks. However, the greenback remains defensive for the month of March, and in fact going back to the beginning of the year when the dollar index peaked at 103.82. Since that time, the DX is off nearly 4%.
Silver remains resilient, holding gains above $18, which may bode well for the underlying trend in gold as well. Silver has definitely been leading on the upside since the healthcare reform bill failed to clear the House last week, raising concerns about President Trump’s broader agenda.
Janet Yellen spoke today in Washington, focusing on job training. She did not provide any queues as to monetary policy moving forward.
Vice Chair Fischer confirmed that the Fed is watching political developments closely and seems disinclined to count any ‘fiscal chickens’ before they’ve hatched. He thinks two more rate hikes this year seems reasonable.
Esther George and Robert Kaplan towed the company line, expressing some optimism about the economy, but reiterating that Fed tightening will be slow and steady. The Atlanta Fed’s GDPNow model calls for 1% growth in Q1. While the “Blue Chip Consensus” is higher, it has been trending lower since late-February and moved below 2% recently.
The economy remains far from robust. While Esther George noted that we are in the midst of one of the longest economic expansions in history, it has been tepid at best. One has to wonder what tools remain at the Fed’s disposal when the expansion ends. Because it will end . . .