5th May 2017

The selling continued across a wide swatch of commodities on Wednesday, with gold, base metals and energy all finishing sharply lower. Gold ended at a six-week low, with no particular reason behind the selling other than a slight firming in the dollar and continued fund liquidation. Politically, the passage of the Republican health care act by a handful of votes was also arguably bearish for gold (and stronger for the dollar) in that delivered President Trump his first legislative win and signaled to investors that perhaps more accomplishments could lie ahead in the area of tax reform and infrastructure spending. We think it is premature to read too much into this one achievement given that the Senate will now have to approve its version as well (a much more difficult undertaking) and the two plans have to get merged in conference-- if they ever get there.