(Reuters via CNBC and Kitco.com) – Gold prices edged up today (Jan. 31) on a weaker dollar and worries over US policy under President Donald Trump, with focus shifting to this week’s meeting of the Federal Reserve.
Spot gold had risen 0.17 percent to $1,197.03 per ounce by 0049 GMT. US gold futures climbed 0.2 percent to $1,195.90.
The dollar wobbled early today after tumbling overnight against the yen, which benefited from its safe-haven status as Trump’s tough stance on immigration rattled investors and curbed risk appetite.
The dollar index, which measures the greenback against a basket of currencies, was down 0.04 percent at 100.390
Backlash built on Monday against Trump’s travel and immigration restrictions targeting seven Muslim-majority nations as opponents tried to throw up roadblocks, including more court challenges.
US consumer spending accelerated in December as households bought motor vehicles and cold weather boosted demand for utilities amid a rise in wages, pointing to sustained domestic demand that could spur economic growth in early 2017, data showed.
The markets were turning their attention to a meeting of the US Fed today and tomorrow. The central bank has forecast three interest rate hikes this year.
The Bank of Japan is set to maintain its massive monetary stimulus today and reassure markets any reversal of its ultra-loose policies is some time off, as recent global bond yield gains test its policy of controlling the yield curve.
Asian shares were on the defensive today as the stringent curbs on travel to the US ordered by Trump brought home to investors that he is serious about putting his radical campaign pledges into action.
The euro zone economy has kicked off the year robustly, data from the Baltic to the Mediterranean showed on Monday, evidence for the European Central Bank that its massive cash stimulus is working but also posing questions about what comes next.
Meanwhile veteran gold trader ‘Bubba’ Horwitz, chief market strategist at BubbaTrading.com, said at Kitco.com that the end of gold’s bear market may be closer than investors think and the event that will reverse the metal’s course might just be this week’s Fed monetary policy meeting,
With gold prices hovering near $1,200 an ounce, Bubba said he is looking for one more move down before gold’s bear trend comes to an end.
“This could be the week that it could possibly happen,” he said. “It’ll take an event and the Fed is the event that could possibly drive it.”
The Fed’s first meeting of the year will end tomorrow and markets will be keeping a close eye to see how the central bank will act on President Trump’s recent actions as well as recent activity in US equities.
To Bubba, however, investor funds will really start to flow into another precious metal: silver.
“Until gold finally turns, silver will the place to be.”
Top: Ten troy ounce gold bars from Crowne Gold. Photo: Mark Herpel (CC-BY-2.0)