GLD - Gold Setback Short-Term Post Comey Testimony

London (June 9)  Buckle your seat belts gold bugs, as gold should see a setback over the very short-term. I still like the SPDR Gold Trust (NYSE: GLD) for the medium term this year, due to geopolitical and inflationary catalysts in play against the U.S. dollar. However, a key driver of dollar softness has been soothed a bit, with the Comey testimony proving less poisonous than it might have been.

The SPDR Gold Trust enjoyed a profitable run-up over the last month, thanks in part to the Oval Office scandal. The Administration's more engaging approach to foreign policy has played importantly as well, namely with regard to Syria, Iran and North Korea.

Still, the mounting allegations against Administration officials, and most recently even the President, have clearly raised risk for stocks and the U.S. dollar, and given gold a lift. It came to a head, somewhat, on Thursday when former FBI Director Comey testified before a congressional panel. There was justified fear ahead of the event that new revelations could implicate the President in an obstruction of justice, an impeachable offense according to at least one expert.

However, the testimony, as I saw it, was less venomous than it very well might have been, though we are unaware of what transpired in the closed-door testimony; it was kept from the media for national security reasons. Still, the market will move now on what it saw, unless credible and concerning leaks surface around the closed door meeting. What the market saw, anyway, was far less frightening than what might have been. By the way, we warned that the event could be a sell-the-news type in a recent report, and that's what happened

Source: SeekingAlpha