Despite big gains in the stock market, gold has also done very well this year. Geopolitical issues and worries over market valuations seem to have given a lift to the metal. However, despite the ongoing trouble in North Korea, more volatile markets recently, and weakening inflation, gold may not be a great bet. One of the big reasons why is the Dollar. Part of gold’s strength this year has been the Dollar’s weakening. However, that trend may come to an end soon, as the Dollar may be set to reverse. Gold is priced in Dollars, so when the latter is weak, it tends to strengthen and vice versa.
OxWFD: So the one big thing on gold’s side right now appears to be the belligerence of North Korea and the tensions it is causing for financial markets. Also, given the Fed’s dovishness, it is hard to see a big Dollar rally starting.