Precious Metals In Review: Week of 8/21/2017

Precious Metals Overview – Week of August 21^th

We started the week with the price of gold a little firmer due to a slightly weaker dollar and softer treasury yields. Overall our market was looking for a direction, whether from a declining equity market or a declining dollar. Gold investors had been hoping for the spot price of gold to settle above the $1,300 dollar level from last week’s rally, but strong selling emerged and stalled that rally.

Gold Price Unmoving

The price of gold stayed stuck in the mud through the week, with a weak dollar and softer Treasury yields helping a little, but the yellow metal is closing out the week still locked in a trading range between $1,270 and $1,300. I will be watching three things: the U.S. Dollar, U.S. Treasury Yields and the Equity markets.  If Gold is going to break out of the trap it is in, I expect it would take a significant move in any of these three areas.

Political Drama Affects the Market

Also affecting the markets this week was the drama in Washington. Still on many minds of investors is the status of White House aide Gary Cohn. Earlier this week, the NYT had reported Cohn had drafted a resignation letter. That gave the Equities market the jitters, as Cohn is thought to be a major driver in the individual and corporate tax reform push for 2017.

Those fears were allayed somewhat in a new Financial Times interview that was conducted yesterday with Cohn. While not mentioning Trump’s response to the tragedy in Charlottesville, Cohn did criticize the administration's response as a whole, saying, "Citizens standing up for equality and freedom can never be equated with white supremacists, neo-Nazis, and the KKK. I believe this administration can and must do better in consistently and unequivocally condemning these groups and do everything we can to heal the deep divisions that exist in our communities. As a Jewish American, I will not allow neo-Nazis ranting 'Jews will not replace us' to cause this Jew to leave his job.”

Later today, a Fed chairwoman will be giving a speech at the Central Banks annual meeting at Jackson Hole, Wyoming. Her topic of her speech will be on Financial stability and most market watchers don’t expect her to say anything of significance on the economy.