Trump‘s tax plans weigh on Gold
Investor’s appetite for risk is returning and puts Gold under pressure. The price of the metal dropped to 1,234 $/oz towards the weekend. The move was triggered by positive economic data on the one hand and the - described as "phenomenal" - tax plans of the US president Donald Trump on the other hand. According to his spokesman, he is working on the largest tax reform since the Reagan era without providing, however, any details so far. These statements were sufficient to fuel the stock markets and for market participants to withdraw liquidity from the "safe haven" Gold. The metal had previously traded at 1,246 $/oz, the highest level since mid-November. Interest of private investors in Germany had already slowed down in parallel to the rising price. However, we expect interest to pick up again as soon as the Gold price approaches the 1,200 $/oz mark.
The relocation of the Bundesbank's Gold reserves to Germany is progressing faster than expected. Last year 216 tons were transported to Germany, thereof 111 tons from New York and 105 tons from Paris. In the French capital, 91 tons of Gold still remain, which are due to be brought to Frankfurt this year. The Bundesbank decided in 2013 to bring about half of the 3,380 tons of Gold reserves to Germany by 2021.