Gold prices appear steady ahead of Trump’s Congress speech later today (28th February 2017). Despite the precious metal encountering a slight dip during Asian trading hours today, as investors apprehensively await Trump’s address; the yellow metal seems to have levelled again later on this morning.
Around 7:30 GMT, the spot price for gold was quoted at $1,253.93, showing that it was up by 0.1% in comparison to the price quoted during Asian trading hours earlier this morning, which was, $1,252.70. So far today, trade for gold has ranged between $1.251.85-$1.253.93.
The spot price for silver today was up by $0.045 and was quoted at $18.340 per ounce during Asian trading hours.
Whereas gold bullion has experienced more of a dip and rise motion so far today, silver has been steadily climbing upwards.
With regards to gold, investors appear to be slightly reserved, as they could be awaiting Trump’s Congress speech to gain clarity before committing to any definite investment decisions.
As mentioned in yesterday’s blog, Trump’s speech is expected to revolve around his economic stimulus plan and his plans to cut taxes. However, underlying support for precious metals looks set to continue, as safe-haven assets are held close to investment decisions during what could be labelled as an ‘uncertain’ time, as the contents of Trump’s speech and future decisions, are at this point unknown.
The only known inclusion of the President’s speech is with regards to ‘ramping up spending on defense’, which he did clarify on Monday (27th February 2017). Trump has claimed that he will be seeking savings from ‘elsewhere’ to pay for a greater defense system. However, in what has come to be known as true Trump fashion, the President has given little away ahead of the Congress address.
Watching and Waiting
It is perhaps realistic to assume, that the gold price could go one way or another following Trump’s address. On the one hand, if Janet Yellen’s (US FED Chair) comments from the previous week are realised, and a rate hike is announced to take place in March, then the precious metal could experience a lower price point over the next 24 hours.
However, MKS PAMP Group trader, Sam Laughlin suggests that, it is likely that support for the precious metals will continue until Trump’s economic plans and promises are turned into real actions. There is also the possibility that the supposed rate hike could encounter a delay, which in turn, would see bullion remain in the limelight.
It potentially could be a case of, ‘wait and see’.
More than Trump
It also should not be ignored that there is more taking place on the world stage than Trump’s Presidency.
Many of our blogs have explored other global situations which are likely to impact on the precious metals, namely Brexit and the upcoming European elections in France and the Netherlands.
At present, persistent speculation concerning the Greek fiscal policy are rumoured to be contributing to European political uncertainty, and as such, gold looks to be well supported from this angle.
Gold has overcome resistance at $1,249 per ounce and could suggest higher prices for the yellow metal, as it moves towards its next resistance level of around $1,278 per ounce. According to Reuters, gold is still targeting $1,278 per ounce following its breakout around $1,249 last Friday.
It will be interesting to see what happens to the price of gold and silver come tomorrow morning. Is it possible that President Trump and the Congress speech could shape the demand for the precious metals, despite considering all other global concerns?
What are your gut feelings towards the demand for bullion ahead of Asian trading hours tomorrow?
This blog represents one person’s opinion only. Customers should conduct their own research and take advice before making an investment. We do not offer investment advice.