- Gold is up on a weaker USD
- Gold is also being boosted by probability of higher US fiscal deficits & inflation.
Gold is now trading around 1,330, in New York session and inched up by almost 0.27% on a slump in USD. Apart from a weaker USD, Gold and other precious metals are also being boosted by appeal of an alternative inflation hedged asset on concerns about Trump's spending plans, which will eventually boost the US fiscal deficit and inflation.
Also, fresh North Korean saber rattling by director of US national intelligence may have boosted the risk-aversion move today. Thus safe-haven assets like Gold and Yen is also on upbeat mood. US national intelligence director today said that “time coming ever closer on North Korea”.
USD came under sudden pressure today in the late Asian session. Although the exact reason is not clear till now, it may be a combination of several factors relating to Kuroda (BOJ Gov) reappointment, talk of back door tapering by BOJ (Bank of Japan), curb on FX positions by Japan and a high probable appointment of a hawkish person as Dy BOJ Gov.
Although Japanese PM (Abe) has not confirmed Kuroda´s reappointment, as par some market buzz, Kuroda may be reappointed for an eventual change in policy guidance by BOJ in the days ahead. Kuroda may help the market for an orderly movement, considering his experience in jawboning and controlling the market.
On the other side, market may be also concerned that, if Kuroda will not be reappointed, then the next BOJ Gov would be not so dovish like Kuroda. Thus this BOJ Gov issue may be a double whammy for the USD now and Gold is a prime beneficiary of that USD weakness.
Price action suggests that Gold now has to sustain above 1.335 area for further rally towards 1355-1366 price zone in the coming days; otherwise it may again fall towards 1305-1285 zone.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Forex involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.