Gold has reversed directions in the Thursday session and posted losses. In the North American session, spot gold is trading at $1251.18 per ounce. On the release front, US numbers were solid, as unemployment claims dropped to 232 thousand, lower than the forecast of 240 thousand. As well, the Philly Fed Manufacturing Index soared to 38.8, crushing the forecast of 19.9 points. In Washington, Treasury Secretary Steven Mnuchin testifies before the Senate Banking Committee on the rollback of the Dodd-Frank finance regulations.
Gold has gained 1.5% this week, as the safe-haven commodity has benefited from the political chaos which has gripped Washington. The beleaguered Trump administration appears to be rudderless as it staggers from crisis to crisis. The latest development is that the Justice Department has agreed to appoint a former FBI director as special counsel to investigate possible Russian involvement in the US presidential election as well as any connection between Trump and the Russians during the election campaign. On Tuesday, reports surfaced that Trump had asked former FBI director James Comey to close an investigation into ties between Russia and Trump’s former security adviser, Michael Flynn, leading some lawmakers to question whether Trump had committed obstruction of justice. As if this wasn’t enough for Trump’s aides to deal with, the president is under fire for passing classified intelligence to the Russian foreign minister. Trump initially denied the claim, but has since admitted that he did share intelligence with the Russians, arguing that he had acted within his rights. With the Trump administration frantically trying to douse political fires, investors are concerned that Trump will have more difficulty passing into law his plans for increased stimulus and tax reform. If the crisis mode in Washington continues, we could see gold make further gains against the dollar.