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Gold price gains as strong Dollar drops

The gold price looks to be finishing the week on a high as the strong dollar encountered what DailyFX called an ‘aggressive reversal’ yesterday. The Bullion Desk reported gold at $1,237.89 per oz, after a ‘bullish day’ on Thursday, when prices closed up with gains of between 0.3% and 0.6%. Investor consensus suggests ongoing uncertainty surrounding a long-running bull market, and upcoming European elections.

Although equities have rallied in anticipation of Trump spending on infrastructure and Chinese stability, the continuing bull has served to highlight gold as a good hedge against risk. ‘That hiding political risk is not reflected in markets. People are not that nervous, and there are things that could go wrong, particularly when you think about all of the political risks. That adds to the argument for having gold in a portfolio,’ Russ Koesterich of $41 billion BlackRock Global Allocation Fund told Bloomberg Markets yesterday.

Reuters suggested this would be the gold price’s third week in a row of gaining, saying although many were buying stock there was also appetite for traditional hedges: ‘Dealers are extremely cautious about running the market higher as the March Fed rate hike debate will likely play out for the foreseeable future,’ Stephen Innes, senior trader at OANDA told the newswire.

The March rate hike debate is clearly having an impact as it suggests, along with a strong Dollar and a bull market, a rise in inflation – a scenario that is unlikely to dampen gold’s attractiveness.  

 

Link to this article: : http://www.goldmadesimplenews.com/gold/gold-price-gains-as-strong-dollar-drops-12979/

Posted by on Feb 17 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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