Gold Remains Strong Despite Delay in Its Climb

Gold inched up in trading Tuesday, January 10, 2017 after an impressive jump in price the previous trading day, based on a retreat of the dollar and the stock market. Still, at a closing spot price of $1,186.00 per ounce, up $5.00 from the previous day’s close, the yellow metal is clearly strong. Demand for physical gold from China, the world’s second biggest consumer, remains ample just before that country’s lunar new year. Its producer price index has risen to a five-year high.
 
The market has also encountered an accelerated demand for gold exchange-traded-funds (ETFs) in the first two weeks of 2017. From a technical perspective, gold futures look promising too.
 
The biggest driver of the gold price right now is economic uncertainty – uncertainty about whether the Federal Reserve holds to Fed Chair Janet Yellen’s intention to approve three rate increases this year; and uncertainty too about the decisions President-elect Donald Trump will make once he’s officially inaugurated in seven days.
 
Through social media, and discussions with the New York Times, Trump has announced his demand that Republicans, the controlling party of both the House and the Senate, vote to dismantle the Affordable Care Act (ACA), and replace it with something better immediately. Some in the GOP, however, argue that replacing the ACA will require two-three years.
 
Unaccustomed as he is to the tortoise pace of American politics, our new President will have his work cut out for him. But until public opinion and the congressional outlook begin to accept Trump’s bold statements as his inimitable style, markets will continue to react in knee-jerk fashion to his whim.
 
In another development, word in the financial community has it that Standard and Poor’s has downgraded nearly three times as many credit ratings as it upgraded in 2016. The financial services company expects to ramp up this trend in 2017.This could turn out bullish for gold since investors in the shiny metal frequently rely on S& P’s ratings of particular governments’ finances to assess how confident they should be in the strength of their respective economies.
 
While the dollar index traded a bit lower on Tuesday, it still reflects technical strength sufficient enough to delay gold’s ride higher. Nymex Crude oil’s lower prices also could also slow down a bullish climb for the yellow metal.
 
We cannot overstate the value of investing in physical gold during these uncertain times. If the incoming administration only achieves a small part of its ambitions to rebuild the nation’s infrastructure and to dismantle the Affordable Care Act, the country could be in for a heavy dose of inflation. History shows that gold thrives when inflation gets out of hand. You’ll clearly need more of it to protect your retirement account. Get your FREE GUIDE to protecting your IRA or 401k today.
 
For more information, call 800-777-6177 now, and ask to speak to a Fortress Gold Group representative.

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