news.goldseek.com / By: Arkadiusz Sieron / 3 March 2017
As everyone knows, the aftermath of the U.S. presidential election was a disastrous time for the yellow metal. However, gold rebounded at the beginning of 2017, gaining almost 6 percent in January and rising further in February, as one can see in the chart below.
From the fundamental point of view, there are three main reasons for gold’s strength: uncertainty about Trump’s policies; the upcoming elections in key European countries; and, finally, the pullback in the U.S. dollar and the real interest rates, as the fear that the Fed will be behind the curve, letting the inflation genie out the bottle. Let’s analyze them in detail now.
Surely, the new administration in the United States creates uncertainty for the future, breeding fear and pushing investors into the arms of gold. However, periods of transition always increase the uncertainty, at least temporarily. Ok, Trump’s rhetoric may be slightly unusual, but his actions should hardly surprise anyone, since the new president generally fulfills his promises (in contrast to other presidents, actually).
We agree that many geopolitical threats, like elections in the Netherlands, France or Germany, may spur some safe-haven demand for gold. However, when they unfold, the uncertainty
Read more ... source: The Bitcoin Channel
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