Marex Spectron Bullion Thoughts

A very lacklustre week in the world of precious metals, with gold achieving a less than twenty dollar range for the entire period. It continues to follow the dollar like an obedient hound and I don’t see that changing in the foreseeable future. I think the market looks weak and may well be vulnerable to a drop down to the low 1200’s if the dollar continue to strengthen. However, it really is all down to the greenback’s moves, so trade accordingly.

Obviously there are other factors that can affect gold, but for the time being these have taken a back seat. Namely geopolitical concerns and the on-going investigation into Russian influence on the US election. If either of these should flare up, then obviously gold will move, especially the former. President Trump is at the moment in Japan at the beginning of a five country tour including South Korea and China. He is due at an Asia-Pacific summit meeting in Vietnam, which starts on Thursday, where he will also talk to Putin. The fact that he is in such close proximity to North Korea could prompt them to do something stupid, but whatever happens there is plenty of scope for news headlines and sharp market movements. This will probably be the focus for the week, but as always a close eye should be kept on US economic releases. These are thin on the ground, with nothing of interest on Monday, Tuesday or Wednesday. Thursday sees Initial Jobless Claims and Wholesale Inventories, then Friday is again quiet with only University of Michigan Forecasts due.

So, overall expect a quiet week, but keep a close eye on Trump’s trip out East!! It may well be the only thing of interest for a while.