The US dollar’s fall is profit taking before Trump’s swearing in which if it continues till Thursday can result in a technical breakdown. Weakness in the US dollar resulted in the rise of gold, silver and industrial metals. Crude oil fell as traders assessed supply side pressures for the rest of the quarter. Natural gas also had a technical knock down.
Price moves in metals and energies are due to position squaring and rebuilding before Trump takes over as US president. There is some section of the investment community which believes that pre-election promises implementation will not be easy for Trump. There may not be a massive boost to jobs growth. The pace of interest rate hikes by the Federal Reserve will be slower. This group is long gold and short dollar with hedges in the option market to protect against a failed investment strategy.
This post was published at GoldSeek on 10 January 2017.
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