Marex Spectron Bullion Thoughts

On Friday, gold slavishly followed the dollar with some jerky moves in the London afternoon session as various US economic figures were released and rumours surfaced that Jerome Powell is looking like the favourite for new Fed chairman. This weakened the dollar and in turn pushed gold higher towards the close. Overnight and this morning the markets have been very quiet and are pretty much unchanged.

It is an interesting week ahead and will definitely be a jumpy one with new developments on US tax reform expected. As I said above, the next Fed chair should be announced and we have US payrolls and employment numbers on Friday. On top of that, we await news possibly today of criminal charges in the on-going  “Russian links” investigation, which will be closely watched to see if Trump is dragged into the affair. And for those of you who tire of US only news, the Bank of England should raise rates on Thursday and the euro will be somewhat vulnerable to headlines out of Spain.

All in all, lots going on, but as I have said before, these factors will influence the dollar which in turn will dictate the direction for gold. We continue to be ruled by the greenback in the absence of any geopolitical fear factors.

Today also sees the release of the US PCE Deflator and Personal Spending, figures that are watched as inflation measures. These come out at 12:30 London time.