Gold was back above $1,200 an ounce on Tuesday on increased safe haven demand as US President Donald Trump‘s immigration ban shook global markets and one his advisers suggested Germany was taking advantage of the European Union and the US by using a “grossly undervalued” euro.
Spot gold climbed 0.4% to $1,200.00 per ounce in early trade, while April Comex bullion was last up $20 an ounce at $1,216, coinciding also with a weaker dollar.
On Sunday, Trump announced it was banning more than 218 million people from seven Muslim-majority countries from entering the US and also denying landing to all refugees. The move not only rattled the global markets, but caused top federal government lawyer Sally Yates to lose her job Monday, as she refused to defend the new travel restrictions.
The White House said Yates had “betrayed the Department of Justice by refusing to enforce a legal order designed to protect the citizens of the United States” and portrayed her actions as political.
Tensions grew deeper Tuesday, after Trump’s trade adviser Peter Navarro told the Financial Times (subs. required) that Germany was using a “grossly undervalued” euro to its advantage against other nations in the EU and against the US.
Gold prices could be affected also by an scheduled two-day US Federal Reserve meeting that begins Tuesday, as the Fed has said it may hike rates as many as three times this year. No press conference is schedule for Fed Chair Janet Yellen, which may indicate rates will be kept at 0.75%. However, analysts will keep a close eye on the wording of the statement looking for clues on the future path of monetary policy.