Gold price jumps following Trump’s legislative failure
The gold price has risen by more than a percentage point after Trump’s healthcare reform bill failed to pass the American legislative.
Reuters reported that spot gold rose 1.1 percent to $1,258 per ounce by 07:04 GMT after hitting $1,259.14, its highest since February 27, while U.S. gold futures were up 0.8 percent at $1,258.
Gold, which usually has a field day when other macro indicators are looking gloomy, looked relatively attractive amid a weakening dollar, which had its worst day since November 11 2016.
The equity markets also suffered as shares dipped in Asia, where Nikkei, the Tokyo stock exchange, fell 1.5% and the Hong Kong-based bank Hang Seng lost 0.75%.
The rejection of Trump’s bill is symbolic, as it reveals the president’s inability to pass legislation, thereby undermining the likelihood of his economic reforms instigating a period of “Trumpflation”.
Tax reform and spending increases, already seen as radical and hard to push through, look increasingly unlikely as Trump failed to secure political capital on Friday, notably from his own party, who were split on the issue.
The markets took a dim view of the political result, with Ben Gutteridge, head of fund research at Brewin Dolphin, telling Bloomberg TV that the markets were “rattled” at the prospect of not being able to get through deficit-funded tax cuts.
The policy freeze-out means the possibility of an expected fiscal expansion (spending increases) not materialising in the future. This looks set to punish the dollar, which has a notable inverse relationship to the gold price.
In other news, a beach in Australia keeps coughing up gold. Surfer’s Paradise, on the Gold Coast has been rewarding gold hunters with nuggets. The area has a historic link to the yellow metal: Beaches around Currumbin, a nearby suburb, used to yield gold and profitable mines operated locally, at Ormeau and Kingston, in the 1960s.
The Walter Taylor Bridge in Indooroopilly, a suburb in Brisbane, was built on gold — tailings were found when its footings were drilled down into the Brisbane River. Gold nuggets have also been found in Brisbane near streams at Brookfield, Mt Coot-tha and out towards the Queensland town of Warwick.
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