After a dormant period in the professional gold market, last week saw renewed signs of life. Support came at last from continued trade tensions, reflected in the Minutes of the FOMC meeting of April 30/May 1, saying that “ trade policies and foreign economic developments could move in directions that have significant negative effects on U.S. economic growth”, while also noting that prevailing conditions allowed for patience over interest rate policies.
The point here is that gold is constantly Fed-watching but in of late it has tended to have a knee-jerk downward reaction to most Fed pronouncements.
This time the price picked up, which may point to a change in sentiment as the markets move into risk-off mode. The second is that trade tensions have up to now supported the dollar rather than gold but as the chart shows the price has gained ground in euros as well as dollars. We now wait to see whether this was genuine buying interest or short-covering.
Point of interest this week; discovery in England of only the second known Roman coin from the reign of Emperor Ulpius Cornelius Laelianus, reigned briefly in AD269.
