The risk-on attitude that has weighed on the precious metals the past few weeks seems to finally have been lifted on Wednesday, as gold broke out of its slump in a big way during early trading. Spot gold surged above $1,250/oz for the first time in two weeks, gaining more than $15 per ounce to trade around $1,253 per ounce. The silver price followed not far behind, adding about 0.65% to approach the $17/oz threshold.
Platinum traded $5 per ounce higher but palladium was actually down about 1.5%.
Unrest in Washington
Just months into the new presidential administration, controversy and public conflict have become par for the course for the Trump team. Even though the media has basically come to expect such noise out of the White House on a daily basis, and has mostly gotten used to the drama, this has still been a particularly bad week for Washington. The Washington Post points out: "A day barely passes without some new report about the president and his team."
Evidence appears to be mounting that President Trump asked ousted FBI Director James Comey to abandon an investigation into short-lived national security advisor, Michael Flynn. Trump has taken flak for not adequately vetting Flynn before hiring him to the post, where he served for only a matter of weeks before revelations surfaced that he had conflicts of interest regarding foreign governments. The mere appearance of Trump trying to impede any investigation into members of his campaign has heaped more fuel onto the dumpster fire that is the Comey controversy.
On top of the constant turmoil in the White House, several members of Congress are now being implicated in what seems to be an insider trading scandal. At minimum, some reckless stock trading would seem to connect certain representatives' work on legislation with their ownership of stock in companies affected by the proposed laws. What's troubling is how much more commonplace this practice is than many would expect, and how little can be done to hold Congress accountable for cases of insider trading.
These controversies have had the effect of dampening investor expectations for the government, both economically and politically.
In economic news, shareholders have been punishing Ford Motor Co. as its stock price has continued to drop following the company's annual shareholders meeting last week. Ford has signaled that, in order to combat the downturn, it is planning to lay off hundreds of workers and could cut its global workforce by as much as 10% in an attempt to reverse its fortunes.
It was a bad start to the session for stocks in general. While exchanges overseas were mostly in negative territory, Wall St fell sharply at the opening bell, with the Nasdaq leading the way 0.9% lower and the Dow Jones and S&P 500 each tumbling 0.8%. The U.S. dollar was 0.25% lower on the DXY index to 97.85, matching its lowest point since Election Day (November 8th).
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