A great start to the week as gold reaches a six-week high. What makes it more impressive is the fact that the price of gold is higher today even with a stronger dollar and higher Treasury yields. Overnight over 206,000 ounces were added to the Gold ETF helping support additional gains. Overall, without any significant news, I expect some profit taking in gold today, keeping the price of the June contract below the highs of the day reached earlier this morning at the $1,282 level. But we still see the price continuing higher at a two steps forward, one step back type of market appreciation.

Meanwhile, as the Eurozone continues to grow in 2017 at a pace twice as fast as we are here in the states there are some shining lights that deserve attention. Portugal, a country that previously was headed in the same direction as Greece and Italy (just existing as a bailout country), has turned things around. Just two weeks ago, Portugal announced that it has reached a milestone as they were no longer in breach of the EU budget rules. Portugal’s growth has increased and unemployment is at an 8 year low. The country’s budget deficit fell to 2 percent of GDP last year, well below the limit of 3 percent set by the European Commission. Only Greece, Spain and France are currently in breach of the EU’s budget rules. It seems like the sun is beginning to shine for the countries in the European Union.

Here in the United States, the focus remains on the Trump administration. They want tax reform, a simpler tax code if you will. In reality, a simpler tax code means eliminating some tax benefits that many taxpayers have been accustomed to. The question remains, how do you develop a plan that both the Republicans and Democrats can agree on? With the Republicans controlling both houses, one would think there would be a plan in place already. Some on the Hill are calling for a revenue-neutral plan. Some are calling for a border tax. Some are calling for across the board entitlement cuts. The Street is calling for corporate tax reform so the stock market can continue its rally.

Precious metals markets stand to profit from this ongoing uncertainty surrounding the tax debate and the general state of flux within the Trump administration.

Have a wonderful day!

 

 

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