Morning Bid: Gold-plated fear

By Mike Dolan

Jan 26 -

What matters successful U.S. and planetary markets today

By Mike Dolan, Editor-At-Large, Finance and Markets

Gold seemed unstoppable connected Monday arsenic it topped $5,000 per ounce for the archetypal clip ever, vaulting much than 80% implicit the past 12 months.

What’s the trigger for the latest surge? Take ​your prime from the imaginable drivers: a falling dollar, a fracturing satellite order, renewed commercialized tensions, worries astir Fed independence, and a higher ostentation horizon.

Central ‌bank buying and retail speculation besides proceed to boom. So, looking forward, golden and precious metals – with metallic astatine caller records excessively – look apt to stay the haven and hedge of choice.

I’ll get into each that ‌and much below.

But first, cheque retired my latest file connected wherefore this week's Fed argumentation gathering could people a cardinal flashpoint successful the escalating conflict for cardinal slope independence.

And perceive to the latest occurrence of the Morning Bid regular podcast. Subscribe to perceive Reuters journalists sermon the biggest quality successful markets and concern 7 days a week.

GOLD-PLATED FEAR

The latest spike successful the golden terms comes aft a torrid week of geopolitics surrounding Greenland, capped by President Trump’s abrupt U-turn connected subject and commercialized threats against the Arctic land and its ⁠European backers, respectively.

While the about-face has lowered tensions, it was ‌a hollow triumph for Trump’s NATO allies, immoderate of whom fearfulness lasting harm to the confederation successful airy of the president’s erratic, centralized overseas argumentation decision-making.

And the spectre of commercialized tensions inactive looms ample arsenic tariff threats against different allies stay live. Trump lashed ‍out astatine Canada again connected Saturday, threatening 100% tariffs implicit Prime Minister Mark Carney’s pending commercialized statement with China.

Meantime, the dollar plunged to two-month lows against the yen amid speculation astir associated U.S.-Japan enactment to prop up Japan’s currency. This followed reports connected Friday that the New York Fed had checked dollar/yen rates with dealers – considered a precursor to intervention. Any U.S. engagement would reenforce the content ​that Washington wants a weaker dollar generally.

At home, the fatal shooting of different anti-ICE protester successful Minneapolis has further raised U.S. governmental tensions successful what is simply a important ‌election twelvemonth for the Trump administration. What’s more, the furore could hazard a partial authorities shutdown aboriginal this week. Chuck Schumer, the Senate’s apical Democrat, said connected Saturday nighttime his enactment would ballot against backing authorities that includes wealth for the Department of Homeland Security.