Lower Oil Prices Lend Support For The Gold Rally
Oil prices fell for a second week running thanks to optimism surrounding renewed U.S.-Iran diplomacy to reopen the Strait of Hormuz. U.S. President Donald Trump announced on Monday that talks between Washington and Tehran would resume l, adding that U.S. allies in the region, including Saudi Arabia,
Source: OilPrice.com
―
DW NOTE
Lower oil does not "support" gold through some mechanical linkage. Gold is $4,301 because the Fed's 3.5% rate cannot stop 3.5% headline inflation or 5.5% producer inflation, and because Washington is running a 6%-of-GDP deficit with no plan to close it. Oil is down because the Strait of Hormuz shipped 8 vessels last week instead of 135 — a supply route this broken does not indicate strong global demand.