The price of gold back to the highs of the last days
Today we see the market is very unusual picture of simultaneous growth of dollar and gold. The precious metal though and corrected yesterday in the us trading session, but this morning is again returned to the highs of the last two sessions, trading at $1231 per ounce and adding to yesterday’s closing in the U.S. of 0.7%. The dollar index, in turn, as of 11:45 GMT, jumped above $ 96 – a maximum of 20 August, which he achieved in a very short period of time.
So unexpected and nothing special not motivated (maybe American investors see any implicit geopolitical risks before the elections in Congress? Possible!) jump in the dollar increases the risks of correction in the overheated US stock market, which can be triggered by a range of factors – from weak reports tech giants Amazon or Google Alphabet to the escalation of the diplomatic conflict between Washington and Riyadh and its implications for oil prices.
Tomorrow ECB’s meeting on identifying key interest rates in the Euro area is another risk factor. Prior to the infamous “Italian strike” from Mario Draghi, in theory, was a nonzero chance to tighten monetary rhetoric under the conditional slogan “it’s time, brother, time!” But now, after everything that happened in Rome, the opportunity, obviously, is simply absent. On the contrary, Draghi probably will in the section of questions and answers to comment on this ungrateful subject for him.
The Euro could weaken significantly against the dollar, which automatically will further strengthen the index “green”, which in this case runs the risk to break the record July 2017 and October, most likely, will be negative news, in particular, will worsen the trade deficit and the U.S. budget deficit. There is an involuntary issue and is not beneficial whether this development of inter-party opponents trump and could, purely speculative, some big investors like Soros or Buffett, to act in someone’s particular interests, causing frankly the stress scenario in the dollar and the stock indexes of the United States? In any case, an unintentional coincidence of all events believe with great difficulty.
About the unexpected lightning visit of John Bolton to Moscow, the market there are still many questions about its true purpose. Bolton is known as one of the most ardent “hawks” surrounded by trump, and it is in this context, it is unclear how the choice fell on his person for such an important now in the eve of the Congressional elections in the US and increasing on the background of various pseudo-scientific insinuations against the official of the Kremlin, unscheduled visit. Even more surprising is the comment from American officials about the success of his meetings, where it is stated that “the issues of the Caucasus and China”, his Russian counterpart denied.
Anyway, the ruble was trading this morning near the upper boundary of its three-week price channel – 65,70 rubles per dollar, but as of 12:30 GMT back in the more comfortable area of 65.50. While the situation remains calm, but do not forget about today’s statistics on oil reserves in the US, which has the potential to cause additional weakening of the barrel, which in turn will certainly cause stress and in the quotes of the domestic currency.
“International financial center”