The week of Donald Trump’s inauguration as President of the United States is here. This is likely going to be a wild week for gold prices as the world settles following the inauguration on January 20. This past week, President-elect Trump held a press conference but he didn’t offer much information about economic policies. This made the dollar drop slightly, which had a positive impact on the price of gold. Shortly thereafter, the dollar rebounded and the price of gold dipped a little.
Some Questions Persist
Since gold is backed by the dollar, what happens in the U.S. has a big impact on pricing. When industry analysts forecasted the precious metal’s value for 2017, they factored in the Fed hiking interest rates twice. Indications from the Fed don’t follow that assumption. The Fed has noted that there will likely be three rate hikes this year. With three interest rate hikes instead of two, it is likely that gold will not perform as well as expected.
Another question that remains is how the world is going to react to the inauguration and new administration. When the election shocked the U.S. and the world, gold prices fluctuated considerably as investors dealt with the uncertainty of that time.
Where to Focus During Inauguration
Fed chair Janet Yellen is expected to speak at the inauguration. Other Fed speakers are also on tap. Paying close attention to what these officials say when they speak might give investors and industry analysts a clue about what is going to happen for at least the first part of the Trump presidency. It isn’t clear how the market is going to react to the inauguration. However, investors should take the time to carefully consider how the future of the Trump presidency is going to affect the dollar, as well as the price of gold.
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