The gold price is powering ahead today, racking up its third consecutive day of gains as traders position themselves for a speech tonight by US President Donald Trump.
At 5.21 (GMT) gold was trading at $1,261v up from $1,255 in yesterday’s trading.
The precious metal has benefited over the last few days, as investors become skeptical of Donald Trumps planned policies, which include deep personal and corporate tax, as well as unprecedented government spending on infrastructure.
Although the policies look good on paper, the Market is skeptical of Trump at the moment, and many predict that it will be difficult for the US president to push through his plans, especially when the majority of them need congressional approval,
Trump is also on the opposing side to the US Federal Reserve who would like to see higher interest rates to curb rising inflation, while the president would like to see lower interest rates to further increase consumer spending
"The biggest driver of gold has been the relatively weak U.S. dollar. People think that Trump doesn't want a strong dollar and the market thinks that perhaps there would not be a rate hike in the first half of the year," said Jiang Shu, chief analyst at Shandong Gold Group.
Following on from Trump’s speech later in the week, the main driver of gold will be speeches from key policy makers from the US Federal Reserve and the precious metal could move either way,
"We have a plethora of Federal governors speaking this week, including Janet Yellen, which should give the Street a lot more visibility into whether March's FOMC is live," said Jeffrey Halley, senior market analyst at OANDA.
"This is potentially significant because the market is pricing in virtually no chance of the Federal Reserve moving in March. Thus this represents a substantial event risk that could also take the wind out of Gold's sails."he added.
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