The toughest call is on gold – J.P. Morgan

J.P. Morgan Rates, FX & Commodity Strategy team says gauging the next move in gold is a tough call given the fiscal stimulus in the US could strengthen the US dollar, however, at the same time Trump uncertainty could increase haven demand for gold.

Key points

Does it fall on likely broad USD strength as occurred in 2012, or rise on the possibility that President Trump’s international policies will rekindle the bid for alternative reserve assets in 2017?

We are biased towards the latter argument, so think bullion could be much more stable than in 2012 even if the broad dollar appreciates on French sovereign stress.