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- Author of the entry: Mennica Skarbowa
- Date of entry:
No matter where he is, Donald Trump gives investors no respite. At Thursday's NATO summit, he made it clear to world leaders that he has no intention of financing global security out of the US pocket. These words, as well as diplomatic friction at the G7 summit, boosted gold prices to such an extent that even the surprisingly good US GDP result did not harm them.
On Monday, the price of gold continued last week's gains, driven by the espionage scandal surrounding Donald Trump, who has been in the news in recent months. On the wave of growing investor interest in safe assets, the spot price exceeded $1,260 per ounce.
During this time, the dollar weakened significantly against the euro, with the EUR/USD pair reaching as low as 1.1265. The euro was undoubtedly strengthened by the German chancellor's critical statement about the European Central Bank. Angela Merkel announced, for the second time this year, that due to the ECB's inappropriate policy, the European currency is "too weak" for Germany.
On Tuesday, gold recorded its biggest drop in the past week. It should be emphasized that this is an important signal regarding the markets' reaction to further terrorist attacks. It turns out that investors are beginning to take events such as Monday's attack in Manchester in stride.
Due to the dollar rebounding from its lowest level in over six months, gold lost approximately $10 per ounce. The US currency was helped on that day in particular by the Trump administration's new plan to cut spending on healthcare programs and increase defense spending.
Wednesday brought the long-awaited publication of the minutes from the last Federal Reserve meeting. As it turns out, the US central bank is cautious about forecasts for interest rate hikes. FOMC members agreed not to tighten monetary policy until there is hard evidence that the recent slowdown in the US economy is only temporary.
In response to these reports, gold rebounded slightly to around the $1,255-1,260/oz range, where it remained on Thursday. As Suki Cooper, an analyst at Standard Chartered, commented on recent trends in the gold market, gold is currently trapped between $1,200 and $1,300 per ounce. The lower level seems safe due to stable purchases from Asian markets, but the search for a "safe haven" seems insufficient for gold to break higher.
Is that really the case? After Friday's signals from the G7 summit, further attempts to break through this psychological barrier are becoming more realistic. Gold prices rose to their highest level in nearly four weeks on that day. World leaders gathered in Taormina, Italy, had to face an uncompromising Donald Trump. The spot price of an ounce of gold rose to $1,268.69. Interestingly, gold, strengthened by Trump, did not even suffer from the correction of US GDP for the first quarter (1.2% vs. 0.7% reported last month).
Gold ended the week at $1,265.05/oz in London and $1,266.40/oz at the close of trading on the Ocean Exchange. In PLN terms, due to the lowest USD/PLN exchange rate in over a year (falling to as low as 3.7059), an ounce of gold cost around PLN 4,730 on Friday.
Marianna Wodzińska
Head of Trading
Mennica Skarbowa S.A.
On Monday, the price of gold continued last week's gains, driven by the espionage scandal surrounding Donald Trump, who has been in the news in recent months. On the wave of growing investor interest in safe assets, the spot price exceeded $1,260 per ounce.
During this time, the dollar weakened significantly against the euro, with the EUR/USD pair reaching as low as 1.1265. The euro was undoubtedly strengthened by the German chancellor's critical statement about the European Central Bank. Angela Merkel announced, for the second time this year, that due to the ECB's inappropriate policy, the European currency is "too weak" for Germany.
On Tuesday, gold recorded its biggest drop in the past week. It should be emphasized that this is an important signal regarding the markets' reaction to further terrorist attacks. It turns out that investors are beginning to take events such as Monday's attack in Manchester in stride.
Due to the dollar rebounding from its lowest level in over six months, gold lost approximately $10 per ounce. The US currency was helped on that day in particular by the Trump administration's new plan to cut spending on healthcare programs and increase defense spending.
Wednesday brought the long-awaited publication of the minutes from the last Federal Reserve meeting. As it turns out, the US central bank is cautious about forecasts for interest rate hikes. FOMC members agreed not to tighten monetary policy until there is hard evidence that the recent slowdown in the US economy is only temporary.
In response to these reports, gold rebounded slightly to around the $1,255-1,260/oz range, where it remained on Thursday. As Suki Cooper, an analyst at Standard Chartered, commented on recent trends in the gold market, gold is currently trapped between $1,200 and $1,300 per ounce. The lower level seems safe due to stable purchases from Asian markets, but the search for a "safe haven" seems insufficient for gold to break higher.
Is that really the case? After Friday's signals from the G7 summit, further attempts to break through this psychological barrier are becoming more realistic. Gold prices rose to their highest level in nearly four weeks on that day. World leaders gathered in Taormina, Italy, had to face an uncompromising Donald Trump. The spot price of an ounce of gold rose to $1,268.69. Interestingly, gold, strengthened by Trump, did not even suffer from the correction of US GDP for the first quarter (1.2% vs. 0.7% reported last month).
Gold ended the week at $1,265.05/oz in London and $1,266.40/oz at the close of trading on the Ocean Exchange. In PLN terms, due to the lowest USD/PLN exchange rate in over a year (falling to as low as 3.7059), an ounce of gold cost around PLN 4,730 on Friday.
Marianna Wodzińska
Head of Trading
Mennica Skarbowa S.A.
