Dollar, Still a Safe-Haven Currency VS Gold?
Dave Green • 1 min read
Gold prices continued to gain over the last 24 hours and as we had mentioned in our daily forecast yesterday. It managed to close above $1209 after making a high of $1214, though undergoing a small correction since this morning.
Fears and risks flourish over the world over, and is mainly triggered by President Trump and his administration in the US. This has helped to push up gold prices as more and more investors flock to gold looking for safety to their funds.
The dollar, a safe-haven currency, used to be the darling of investors who prefer safety above anything else but even that has been traumatized. One can no longer consider the dollar as a safe-haven currency since President Trump and his administration became risk creators.
Yesterday, we saw Trump and his advisors direct their sarcastic remarks against some of the biggest economies of the world as they accused Germany, Japan, and China of manipulating their currency values and deliberately keeping it undervalued in order to help their economy.
This not only raised the chances of raging war between Trump and rest of the world leaders, but also led to the risk that they might try to undervalue the dollar in order to compete with the other world economies. That’s the reason why we saw gold prices surged swiftly. It is likely you'll see some consolidation through today as the market is waiting for the FOMC rate announcement and statement later.
The Fed is expected to keep the rates on hold but it is expected that they will drop enough hints for further rate hikes in the coming months.