Gold hits 3-1/2-month high as 'Trumpflation trade' fades | Reuters
By Maytaal Angel | LONDON LONDON Gold hit its highest in 3-1/2 months on Friday as the dollar hit a one week low after the new U.S. finance chief poured cold water on the 'Trumpflation trade' that had boosted the greenback this year.Treasury Secretary Steven Mnuchin said on Thursday that any steps U.S. President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August.The comments suggested much work was still needed on the sweeping tax plan that Mnuchin called his main priority, and which investors had bet would stoke growth and inflation this year.'We've got a vacuum of (U.S.
By Maytaal Angel
LONDON Gold hit its highest in 3-1/2 months on Friday as the dollar hit a one week low after the new U.S. finance chief poured cold water on the "Trumpflation trade" that had boosted the greenback this year.Treasury Secretary Steven Mnuchin said on Thursday that any steps U.S. President Donald Trump's administration takes on policy would probably have only limited impact this year, though he wants to see tax reform passed by August.The comments suggested much work was still needed on the sweeping tax plan that Mnuchin called his main priority, and which investors had bet would stoke growth and inflation this year."We've got a vacuum of (U.S. domestic) policy, real (interest) rates going down, the dollar going sideways and geopolitical (jitters) around the world ... all helping gold," ICBC Standard Bank analyst Tom Kendall said."There is apparently a move of institutional investor money into gold and there are usually very good reasons for that."
Spot gold had risen 0.29 percent to $1,253.53 per ounce by 1445 GMT, having touched its highest since Nov. 11 at $1,260.10 earlier, zeroing in on the 200-day moving average. U.S. gold futures rose 0.24 percent to $1,254.40.Tempering gains in bullion, a poll on Friday suggested French presidential candidate Emmanuel Macron would beat far-right leader Marine Le Pen, who has promised a referendum on European Union membership.
Still, the precious metal was supported by tempered expectations of a U.S. rate hike in March after minutes from the Federal Reserve's latest policy meeting struck a less hawkish note than expected.Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced."Even in the event of a rate increase, we doubt the precious metal will lose much ground ahead of the key presidential elections in France in April, coupled with the Washington gridlock that seems to be calcifying," INTL FCStone analyst Edward Meir said.
Holdings of the largest gold-backed exchange-traded fund, New York's SPDR Gold Trust, have risen more than 5 percent this month on geopolitical risk.Silver rose 0.53 percent to $18.26 per ounce, having touched its highest in 3-1/2-months at $18.40. Silver has gained about 1.5 percent this week in what could be its ninth straight weekly gain.Platinum rose 1.24 percent to $1,018.50 per ounce, having earlier hit its highest since early October at $1,028.60; while palladium gained 0.97 percent to $781.25. (Additional reporting by Arpan Varghese and N R Sethuraman in Bengaluru; Editing by Dale Hudson and Susan Fenton)
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By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.