Gold Holding Ground

Gold has risen amid allegations that US President Donald Trump had asked Federal Bureau of Investigation Director James Comey to end his agency’s probe of Michael Flynn, the former National Security Advisor. Trump sacked Comey on May 9th, and is yet to issue any denials, which has increased investor concerns about his ability to implement his ambitious economic plans. Considering the challenges posed by healthcare, the probability of tax reform before the end of the year has been severely diminished.

Furthermore, a successful ballistic missile test in North Korea over the weekend has once again stirred tensions in the region.  The dollar is struggling to remain above six-month lows as investors assesses the impact of the turmoil in the US. Gold was last seen around $1254.00 an ounce. A convincing break above resistance at $1258.00 could see prices rally to $1265.00, which coincides with last week’s highs.

Data from the Ministry of Finance unveiled overnight showed that Japanese exports grew in April to record their fifth straight month of gains. On a year-on-year basis, exports rose 7.50% last month, following a 12.00% surge in March. The increase was slightly below the 8.20% increase forecast by economists.

Exports to China, the country’s largest trading partner, jumped 14.80% to a record April high of JPY 1.19 trillion while exports to the US edged 2.60% higher from a year earlier. Notably, Japan's trade surplus with the US contracted -4.20% to JPY 586.7 billion in April. The recent strength in exports has played a key role in Japan’s most recent moderate, but stable growth. In the first three months of 2017, the economy grew at an annualized 2.20% pace. USDJPY had been stuck in a narrow trading range since the weekly reopening before dipping back below 111.500.