To a large extent, gold’s recent bull run may be the result of the weakening of the U.S. dollar (USD) versus other currencies. The dollar’s weakness is somewhat surprising given expectations for higher rates. Even so, the dollar might further weaken substantially should the markets de-price their anticipation of 2-3 Fed hikes in 2018 and further tightening in 2019.

One must wonder then if gold’s lack of concern about the Fed possibly hiking rates three times in 2018 and an additional two times in 2019 might be positioning the yellow metal for a bull run in the event the Fed’s actual rate hikes fall short of market expectations.