After the November 2016 U.S. presidential election, the market expected some uncertainty and it’s what we got. However, many thought that after the January 2017 inauguration the haze of uncertainty would clear and that doesn’t seem to be the case. As President Trump reveals his policies, the market is quick to react, but we have yet to see the full pictures and it is leaving many favoring safe haven investments like gold.
Gold has reached new heights this week and could climb even further in the coming weeks with some estimating it will hit $1,250 an ounce sometime in February. Gold opened at about the $1,230 mark in the U.S. today, February 7, 2017, but the spike in gold isn’t only seen in the United States. The gold rate today in Dubai is reaching a record high. The increase in gold prices in both countries is attributed to heated political events in the U.S. in the past month.
Geopolitical Pressures in the U.S.
Trump’s ban on immigrants from seven largely Muslim countries has raised geopolitical tensions and has caught the eye of global markets. While it is not a direct impact on the gold market, it is, in fact, a trigger for more uncertainty about trade and economic policy. The U.S. President’s tough rhetoric on currency strength caused the U.S. Dollar to dip last month and could continue a trend of weakening for months to come, effectively driving gold values up.
Market Reactions: What’s in Store?
There are several unknowns that can vastly change the gold market in the next several months. International trade policies, like NAFTA, could be in jeopardy for revocation or alteration.
Policies that incentivize U.S. manufacturing sites to stay in the U.S. could also be in the pipeline. The Fed will also take mitigating measures to ensure inflation and interest rates are in line, but those changes are currently at a standstill.
As these economic policies roll out, they will change the way the U.S. Dollar performs and can push investors to higher yield stocks or to hold tight to safe haven investments like gold.
To stay abreast of up-to-the minute changes and tap into global markets, the best way to trade gold is through online platforms. The gold market will continue to evolve over the coming months as more announcements come from the White House and international market players make policy decisions.
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