Gold buoyed by Trump remarks on QE and interest rates
Gold is back on the rise and testing the water above $1,300 this morning, buoyed by a stumble in the dollar as Trump once again weighed in on territory that previous Presidents have steered clear of.
Trump called on the Fed to cut interest rates and conduct more quantitative easing in order to support the slowing economy, an odd request for extraordinary measures at a time when unemployment is only 3.8%, jobs growth is strong and growth is decent.
Gold Daily Chart
I doubt Trump is going to rein in these demands going forward, which could heap further pressure on the dollar and support the yellow metal. That said, the recent trend is against it and unless we break back above $1,325 – roughly the March high – gold will continue to look vulnerable. We’re still some way from those levels yet though and near-term it’s the greenback that’s actually looking vulnerable which could be good news for gold bulls.
Gold 4-Hour Chart
A look at the momentum indicators on the 4-hour chart aren’t particularly supportive of a break through $1,325, with the MACD histogram and stochastic failing to make new highs during the most recent price peak. Of course, that doesn’t mean further peaks won’t follow, it simply suggests it may be something of an uphill struggle. New highs or lows with momentum supporting it is always more comforting.