The weak Dollar supports Gold after Comey’s Dismissal

Spot gold (XAU/USD) inched higher form an eight week low hit in yesterday’s session. Overnight, US President Donald Trump fired FBI Director James Comey, which sent the US dollar lower but expectations for a rate hike from the Federal Reserve in June continues to drag on the yellow bullion.

As of 1 am GMT time, spot gold was at $1,221.82 an ounce. The yellow metal had hit $1,213.81 an ounce on Tuesday. This was its lowest since March 15. US gold futures were also up, rising 0.5 percent in Asian trade hours.

Gold rises as the Dollar falls on Comey’s dismissal

After US President Donald Trump abruptly fired FBI Director James Comey, in a move that shocked Washington, investors left the US dollar for safe haven assets like gold. In other news supporting the yellow metal, news that the rogue nation of North Korea is gearing up for another missile test also supported the bullion.

Pyongyang’s ambassador to the United Kingdom, Choe-Il, said that his country is ready to conduct a sixth nuclear test. Observers have said that such a test was likely. However his frank comments reminded markets that tensions could escalate on the recently calm Korean peninsula.

On the other side of the coin, bullion traders are getting ready for another round of monetary policy tightening from the US Federal Reserve. Fed Funds futures are now pricing in close to a 90 percent chance the Federal Reserve would raise its benchmark overnight rate by a quarter of a percentage point to a range of 1.00 percent to 1.25 percent at its June 13-14 FOMC monetary policy meeting. This will only add to the heavy selling pressure the yellow metal is under right now.