Marex Spectron Bullion Thoughts

I have been away for a while, hence the lack of Bullion Thoughts. However, in my last email I said that the market had not priced in North Korea and that if something was to occur, the price of gold would quickly react and exactly that has now happened. I also wrote “ I have said all year that one should hold gold on the basis of the Trump presidency and various other geo-political factors”.

Not that I am banging my drum, (well maybe a little!), but the price has reacted exactly as it should have done and we now find ourselves near the highs of the year, having conclusively broken the resistance at 1300. There has been a lot of waffle from the usual analysts about technical factors etc., but the simple fact is that we are here because of the dollar and North Korea , nothing more. Funds are long, ETFs have been buying as have speculators and the market is currently very long. Any peaceful news out of Asia will send the price back down, unless the dollar weakens considerably at  the same time.

However, I doubt very much that North Korea is going to back down from its bellicose rhetoric and actions and I also doubt that Trump will keep quiet, so on that basis, stay long of gold. The Fed are also helping gold’s cause by talking down interest rate rises and keeping the dollar weak. All in all, this market is one hundred percent governed by  news and the dollar. Keep your eye on that and you will know where we are going.