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Gold on Longest Monthly Win-Streak Since 2010

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Gold advanced 0.05% in May, according to the Financial Times of London, finishing the month at $1,268.92 per ounce

That may not sound terribly significant, but put in a broader context, we find gold is on quite the win-streak.

May marked the fifth consecutive monthly advance for the yellow metal. The last time gold went on such an extended run was six-and-a-half-years ago. Year-to-date, gold has advanced a healthy 10.6%.

Safe-haven buying has been one of the primary factors in gold’s surge over the last five months. Pres. Trump’s confusing policy flip-flops, questions about Russian influence in the White House, wars and rumors of war, and global political turmoil have all led investors to seek the historical security offered by gold.

The biggest day for gold last month was May 17 when reports came out asserting US president Donald Trump sought to interfere with a probe into his campaign’s ties with Russia. Many questioned whether this could be Trump’s Watergate. Spot gold rose 2% to $1,261.36 that day, erasing nearly all of the previous losses for the month.

While nothing may ultimately come out of all the accusations and probes, the political circus  may make it difficult for the president to push forward with his agenda. One thing is pretty certain, uncertainty will continue in the coming months.

Simple supply and demand has also been a factor. Global demand for the first quarter of the year was up nearly 9%, driven by Asia’s hunger for gold. Meanwhile, mine output in both China and Australia fell.

A weakening dollar also helped push the price of gold up. The dollar index fell 2.1% over the month of May. The index is a gauge of the greenback against six other major currencies.

Some analysts worry if the the Fed’s continues pursuing a path toward interest rate normalization, it could strengthen the dollar and put downward pressure on gold prices. But as we have reported, the Federal Reserve is actually stuck between a rock and a hard place as it tries to choose a path forward.

Of course, nobody can predict the future. The only certainty is uncertainty. But there is no denying gold is currently following an upward trajectory and has been since the beginning of the year.

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