Trumps failure supports Gold
Gold benefits from the flagging confidence in the fast implementation of the economy and stimulus program by President Trump. Mid last week, the postponement of the vote on the healthcare system (Obamacare) already fuelled concerns about the planned tax cut and infrastructure measures by Trump - as well as respective inflation and interest rate expectations. After the health reform finally collapsed on Friday evening, Gold reacted with further gains and climbed as high as 1,259 $/oz this morning, the highest level in 4 weeks. The metal’s move was supported by the depreciating equity markets and the US Dollar, which fell significantly in value after the failed vote. In relation to all important currencies the US Dollar fell to the lowest level since the beginning of February. Buyers of Gold are currently mainly ETFs and speculative market participants, while physical investors in Europe use temporary dips for purchases. Of particular interest are the 1oz, 100g as well as 1kg bars.
From a technical point of view further gains are possible. The 200-day moving average is currently at 1,259.33 $/oz. If this important resistance level is significantly overcome, we may see the metal climbing to 1,265 $/oz at first and then to a level between 1,285 $/oz and 1,290 $/oz.