Gold Reached a Four Week High on Monday

Gold moved to a four week high on Monday as the weaker equities and 13 month-low dollar extended support to it. The political uncertainty in US helped in weakening of US dollar.

Spot gold traded up to 0.1% high at 03:33 GMT from the previous session. US gold for delivery in August rose by 0.1% from the previous session.

Political instability in US weakens dollar

US political disruption strengthened when hopes for quick passage of President’s tax reform agendas and stimulus were dampened. According to the White House’s statement on Sunday, President Donald Trump is open for signing legislation which will toughen sanctions on Russia after the reaching of an agreement by Senate and House leaders on a bill last week.

The Senate Leaders planned to hold a procedural vote as early as this Tuesday which will take up the legislation to replace or repeal Obamacare. But it is unclear which version of the bill they would vote on.

Gold demand in Asia eroded previous week

Last week due to higher prices and a seasonal slowdown, Gold demand in Asia eroded last week including the second biggest consumer India.

Hedge funds managers increased their net long positions in Comex Gold first time in 6 weeks in the week of July 18 according to the US Commodity Futures Commission data.

In July, Japan’s manufacturing activity growth slowed for the second month directly as the export demand stagnated.

Yaron Mazor is a senior analyst at SuperTraderTV.

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