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- Author of the entry: Mennica Skarbowa
- Date of entry:
Gold had its best week since mid-April. Thanks to the turmoil surrounding Donald Trump, metal prices rose by more than 2% during this period, with Wednesday seeing the biggest jump since Brexit. Polish investors took advantage of the opportunity to buy, which had been ongoing for several days, due to the exceptionally low dollar exchange rate, which had just had its worst week in over a year, with an ounce of gold costing just under PLN 4,700 on Friday.
Last week began fairly calmly, with gold prices continuing their upward trend after recently hitting a low of $1,213.81/oz. Weaker-than-expected data on the state of the US economy dampened expectations of aggressive monetary policy by the Fed this year. Tuesday's US real estate market indicators also disappointed, and the price of the metal gradually climbed, already exceeding the USD 1,240 per ounce mark.
The price rally that took place on Wednesday was primarily due to Donald Trump, around whom the threatening word "impeachment" is being used more and more often. This time, it concerns reports that the US president disclosed details of a secret operation concerning ISIS to Russia and attempted to influence the course of an FBI investigation. Due to the endless controversies surrounding the US president's actions, investors are increasingly losing faith in his ability to influence the economy.
Fears that Trump's promised reforms will never be implemented are becoming increasingly justified, as reflected in the performance of the US stock market and the condition of the dollar. On Wednesday, the Dow Jones index fell by almost 2%, which was the worst result since the US presidential election. At the same time, optimistic comments following the Merkel-Macron meeting strengthened the euro, and the EUR/USD pair exceeded the long-unseen level of 1.11.
Gold, on the other hand, recorded its best day since the announcement of Brexit. Breaking through the resistance level of $1,245/oz triggered a wave of technical buying, and the spot price of an ounce of metal exceeded $1,260.
On Thursday, the dollar strengthened slightly and gold returned to around its 200-day moving average of $1,245/oz, but on Friday it regained some of its lost luster, ending the week at $1,255.60 per ounce. The head of the Federal Reserve in St. Louis, James Bullard, played a significant role in this increase, stating on Friday that the Fed's planned interest rate hikes may be a little too fast for the weakening US economy.
Marianna Wodzińska
Head of Trading
Mennica Skarbowa S.A.
