Thanks to a stronger dollar, gold prices trended lower during early trading on Tuesday, losing about $5 per ounce to $1,286/oz. This is likely a necessary breather for the markets, as the dollar has been stuck in a downtrend for the past three weeks. This has naturally coincided with higher precious metal prices. Spot silver actually gained 5¢ on Tuesday to remain above $17 an ounce.
Platinum and palladium each lost about 0.7%.
Meanwhile, the dollar moved about 0.35% higher on the DXY index to 93.4. Consequently, the euro and yen, the two largest components of the DXY basket, both slid back against the dollar. Bonds also rose, with the 10-year Treasury yield falling 1 basis point to 2.20%.
The stock markets around the world were in the green virtually across the board. This helped European indices snap a three-day losing streak. Wall St also opened sharply higher. Even as equities climbed, there is growing concern about a market correction as investors are beginning to wonder aloud what risk factors could derail the current bull market. That list appears to be ever-growing, and many in the business community are beginning to lose faith in Congress's will to enact the president's agenda.
Speaking of the White House, last night President Trump gave a national address on the state of U.S. military strategy in Afghanistan while speaking in front of a group of uniformed service members in Virginia. The country has been occupied by American forces for the last 17 years, making the conflict in Afghanistan the longest-running war in U.S. history—one that Trump inherited from his predecessors.
The prepared remarks were considered by many to be the most measured and focused speech President Trump has given since he took office. In addition to outlining the mistakes of past administrations (such as telegraphing U.S. strategy with preordained withdrawal deadlines) and explaining the evolution of his own thinking on the topic, the president spoke about U.S. regional partnerships with Pakistan and India. He placed greater emphasis on the former's role in combating terrorism and general instability in the Middle East. Moreover, Trump reaffirmed America's commitment to a more tolerant and open society without equivocating about the goals in Afghanistan: destroying terrorism rather than nation-building.
Volatility was down in the markets on Tuesday, which is to be expected after the bout of frantic action we've seen over the last five trading sessions.
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