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Gold

After suffering a sharp decline last week, A Weaker US Dollar Allows Metal Recovery including Gold. Prices were able to post a recovery as the US Dollar rally took a pause and softened somewhat. The release of the latest FOMC meeting minutes this week confirmed that most members foresee that a further increase in rates will “soon” be warranted if the economic outlook progresses as expected. However, the minutes took a dovish turn as they revealed less encouraging discussions around inflation. Members debated whether inflation was progressing as it should and noted that there was “little evidence” of overheating in the labour market. The lack of optimism around inflation has been a clear sticking point for the market which has taken it as a sign that the Fed is no longer confident in achieving and maintaining 2% inflation in the horizon term.

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Gold received further support this week from a downward shift in global risk sentiment. Firstly, President Mattarella of Italy gave support for Giuseppe Conte to lead a coalition government in Italy, the first of its kind to be made up of anti-establishment parties which have vowed to disrupt the European Union. Secondly, President Trump said that it is now unlikely that the planned summit with North Korea will go ahead given Kim Jong Un’s resistance to giving up nuclear weapons.

Weaker US Dollar Allows Metal Recovery Gold

Gold prices are now challenging the key 1296.65 level (key pivot over 2017) from below. If this level holds as resistance, further declines are likely, with the 119.52 level the next major support zone.

Silver

Silver prices remained stagnant this week despite the fact that a weaker US dollar allows metal ...

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