Gold and silver have started the new week how they ended the last one: higher. Last week saw silver extend its bullish run for the sixth straight week while gold recorded its fifth weekly gain in six. Correspondingly, it was the dollar’s fifth losing week in six as the Dollar Index fell below 100. U.S. stock markets ended the week higher, however, with the S&P 500 index extending its bullish run for the fifth consecutive week.
Investors got very excited about the potential for tax cuts, fiscal stimulus and deregulation in the weeks following Donald Trump’s election victory, but the focus appears to have shifted recently, with the less market friendly immigration, trade and forex policies coming to the fore. President Trump has been very active in the early days of his tenure but with traders not knowing what policies he’ll target next and with details on tax cuts and stimulus lacking, there is some understandable unease at the moment.
The U.S. dollar had another difficult week as it depreciated against most major pairs. Central banks remained on the sidelines as the Bank of Japan, U.S. Federal Reserve and Bank of England all left their monetary policies unchanged awaiting further data. The Reserve Bank of Australia is up next on Monday, Feb. 6 at 10:30 pm EST. It is anticipated the RBA will not make any changes on its February meeting.
The first non-farm payrolls report of the year will be released later at 13:30 GMT. It is probably not going to be the most important one for the year. That is because Donald Trump’s promise of creating more jobs will take time to come to fruition, if it does at all.
Fears of inflexibility and rising costs are sapping enthusiasm for the London Metal Exchange's new suite of gold contracts, potentially leaving the exchange reliant on the threat of an increasing regulatory burden to drive uptake.