Gold Surges on a weaker dollar

Jan 25 (Reuters) - Gold prices on Thursday edged to their
highest since August, 2016, buoyed as the U.S. dollar hit
three-year lows after comments by U.S. Treasury secretary Steven
Mnuchin that he welcomed a weaker currency.
    Spot gold        had risen 0.2 percent to $1,361.10 per
ounce by 0258 GMT, after hitting its highest since Aug. 5, 2016
at $1,361.87. 
    U.S. gold futures         were up 0.3 percent at $1,360.60
per ounce.
    The dollar slumped after Mnuchin told the World Economic
Forum in Davos on Wednesday that "obviously a weaker dollar is
good for us as it relates to trade and opportunities". His
comments were seen by markets as a departure from traditional
U.S. currency policy.             
    "Investors were more than willing to pay hefty insurance
premia as a hedge against the inflationary impacts from a 
hapless dollar," said Stephen Innes, APAC head of trading at
OANDA. 
    "With traders' base case scenario to sell the dollar at all
costs, gold prices should remain well supported on dips and
could be poised to move even higher on the next U.S. dollar
wobble."

Reuters

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Stephen Innes

Stephen Innes

Head of Trading APAC at OANDA
Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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