The British pound appreciates sharply as the Supreme Court decides the Prime Minister does not have the authority to trigger Article 50 and start Brexit without consulting MPs. The market believes this news may end with the defeat of Theresa May's ‘hard’ Brexit plans.
The U.S Dollar is also seeing some strength against a basket of currencies due to the upcoming U.S earnings season. 10-year-treasuries are up and gold falls in response to this and the increase in the Dollar. Inflation increases and with it the likelihood of aggressive rate hikes in 2017. However, Trump and Yellen seem to be on opposite sides regarding what to do with the Dollar. Trump wants its price to fall for the benefit of trade and employment in a U.S - an outcome that would almost certainly be bullish for precious metals. Yellen, on the other hand, feels that running the economy "hot" for too long, will have serious negative economic consequences.
Gold investors should be inclined to favor Trump's policy because if Yellen has her way, and rates go up, the U.S Dollar and 10-year-treasury will put severe pressure on gold prices. A cheap dollar Trump economy is a gold investor's dream because a combination of his massive spending policy, low taxes and volatile rhetoric are a perfect storm for a massive gold rally. Nevertheless, gold currently trades at a disappointing $1,188.00. Silver trades for $16.83. Palladium and platinum trade for $732.50 and $973.60 respectively.
