Last week, the counter-rally against the far-right protest in Charlottesville turned into tragedy. What does it mean for the gold market?
As both the Fed and the ECB released the minutes of their last meetings, we have recently focused on monetary policy. However, the last week was also hot for Donald Trump. On August 12, there was a protest of far-right groups against the decision to remove the statue of Confederate General Robert E Lee. In response, a counter-protest was organized. But it ended in a car attack as a vehicle plowed into the Charlottesville crowd, killing one person and injuring several others.
The tragedy itself probably would not have affected the financial market, but Trump’s remarks in the aftermath did. He said: “We condemn in the strongest possible terms this egregious display of hatred, bigotry and violence, on many sides. On many sides. It’s been going on for a long time in our country.” Trump’s remarks were criticized for failing to explicitly condemn the radical right and for apparently blaming both sides for the violence in Charlottesville. In response to these words, several CEOs resigned from White House business councils. Actually, Trump was forced to disband two of them (the Strategic and Policy Forum and the White House Manufacturing Jobs Initiative) on Wednesday after corporate leaders continued to step down.
Surely, the role of these advisory councils was mainly symbolic. But the disbanding implies that the support of corporate America for Trump has weakened. Of course, big business still hopes that the administration will introduce tax cuts and continue to support the pro-growth agenda. However, the latest developments undermined the position of Donald Trump and increased political uncertainty, which seems to be positive for the gold market.
The key takeaway is that protests in Charlottesville ended in tragedy. Trump’s remarks were considered inappropriate and prompted several CEOs to step down from advisory councils. The president was forced to disband some of them. And he even fired his controversial chief strategist Steve Bannon on Friday. The turmoil in Trump’s administration should be supportive for the gold market, but the firing of controversial Bannon could bring some calm and moderation into the administration in the long run, which is bad news for the yellow metal.
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