The gold price is under pressure in today’s trading after a speech last night by U.S. President Donald Trump, as well as comments by various U.S. Federal Reserve board members.
At 7.18pm (GMT) gold was trading at $1246 down from $1,248 in yesterday’s trading session.
In a speech to congress last night, Trump laid out his plans on tax reform and spending on infrastructure, amongst other things, which although lacked concrete details, was enough to boost the U.S. dollar and pressure the gold price,
David Morrison, senior market strategist at SpreadCo said:
There was precious little detail over such key issues as tax reform, infrastructure spending, regulatory roll-back and Obamacare. But there was plenty to convince everyone that he was serious about driving forward with these issues.
“Additionally his tone was far more Presidential than we’ve heard of late and the most unifying message that we’ve heard since his victory acceptance speech back in November." He added.
Comments by New York Fed President William Dudley that the U.S. economy was moving forward also affected the gold price, with some predicting there is now a real possibility that the Fed will lift rates in March:
It seems to me that most of the data we’ve seen over the last couple months is very much consistent with the economy continuing to grow at an above-trend pace, job gains remain pretty sturdy, inflation has actually drifted up a little bit as energy prices have increased ... We’re very much on the trajectory that we said that we thought we’d be on and we said if we were on that trajectory, we’re going to gradually remove accommodation, so, put it all together, I think the case for monetary policy tightening has become a lot more compelling.