Gold starts the new year with a bang. The spot price of the yellow metal settles at $1,182.70 - a fourweek high - as of January 5, 2017. In the United States, doubts about the Fed’s aggressive rate hike plan keep the Dollar suppressed.
Weak economic data in the housing market suggest the American economy may not as strong as was previously expected. Economic fragility makes aggressive rate hikes a risky proposition.
SPDR Gold ETF (GLD)
In Europe, the ECB remains on its dovish course despite positive economic news in the Eurozone. In the United Kingdom, the mainstream media has been utterly discredited as every single sector of the British economy is doing better than expected.
Much of the Dollar's recent weakness comes from policy decisions in Asia, specifically China. The Chinese communist party boosted their currency via increases to key reference rates. This move is widely seen as protection against the looming inauguration of Donald Trump.
This policy has hurt the Dollar and helped gold prices but is unlikely to do much for the Chinese economy - an economy predicted to slow down in 2017.
