USAGOLD/Peter Grant/05-26-17
Gold charged to a new 3-week high amid resurgent geopolitical concerns. This seems to be overriding this morning’s better than expected U.S. economic data.
President Trump acknowledged to Japanese PM Abe that North Korea is a “big problem” and pledged that that problem will be “solved.” The markets seem to have interpreted that as a threat.
The first revision to Q1 GDP came in better than expected at +1.2%. Durable goods orders for April also beat expectations, falling 0.7% on expectations of -1.1%. March saw a significant upward revision to +2.3%, versus +0.7% previously.
This certainly keeps the June rate hike on the table. Minutes of the last FOMC meeting revealed that the Fed waffled a little in May. Today’s should renew confidence that there’s another 25 bps hike coming in several weeks.
The dollar firmed accordingly, but gold is maintaining its gains. Given the political and geopolitical uncertainty, traders may be reluctant to carry short gold positions into the long holiday weekend.
