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Donald Trump Jnr puts gold back on the table

Despite a negative medium-term projection for the gold price owing to tighter monetary policy, gold has rallied amid renewed controversy from the Trump administration, rising 0.3% since Monday. Gold futures for August are up at $1,214.70.

Political tensions involving Donald Trump Jnr have stymied markets. The president’s son released an email chain yesterday which involved a thread between him and what appeared to be representatives of the Russian government, who claimed they had information which would assist Donald Trump Snr’s presidential campaign by tarring rival Hillary Clinton.

President Donald Trump has been involved in an ongoing controversy surrounding his relationship with Russia, and whether state collusion was involved in him securing the presidency.

“It appears that the Donald Trump Jnr’s email release gave gold bugs a boost,” said Michael Armbruster, managing partner at brokerage firm Altavest, to Marketwatch. He added that treasury bills “also participated in the rally as any threat to the Trump growth agenda and U.S. equities is a positive for safe-haven assets”.

Political instability often causes a drag on markets, owing to feelings of insecurity, which make assets such as commodities look relatively attractive. Moreover, it boosts the safe-haven appeal of gold as it is seen as outside the realm of traditional financial instruments.

The other factor on markets and the gold price has been Federal Reserve chair, Janet Yellen’s bi-annual testimony to the US Congress. The markets, knowing that it was a matter of when, not if, rate hikes happen, lagged in anticipation of the testimony, due Wednesday and Thursday. The official line from the Federal Reserve maintains that interest rates will be increased “gradually”.

Market indicators were down slightly, with the S&P 500 closing less than 0.1% lower, a mixed performance from government bonds, and a euro gain against the dollar.

Photo: Donald Trump Jnr. Credit: Gage Skidmore. Licensed under CC BY-SA 2.0

 

Link to this article: : http://www.goldmadesimplenews.com/gold/donald-trump-jnr-puts-gold-back-on-the-table-13272/

Posted by on Jul 12 2017. Filed under Gold News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.

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