Gold appears to be losing out to the dollar as the safe-haven instrument of choice. Certainly the safe-haven impulses have been generally increasing, with the blacklisting of Huawei, belligerent comments from Chinese official media, and on again/off again threats against Iran by the US President, but the dollar has rallied and gold has declined for the past week.

The strong US economic data last week and upbeat economic assessments from Fed Chairman Powell have lowered expectations for a rate cut this year. However, there are reasons to be skeptical that the US and China will come to an agreement on trade anytime soon, and that should ultimately support gold.

The news overnight that Huawei was granted a temporary license by the US may be seen as encouraging, but the trade has to be getting more skeptical with each back and forth move in the trade fight. Gold and silver were lower overnight but were confined to yesterday's ranges.

The trade may be looking ahead to the Fed minutes release on Wednesday for any additional insight as to the Fed's mood on interest rates for the rest of the year. If the minutes show a particularly dovish attitude, it would be good news for gold bulls.

If the wedding season in India doesn't seem to support gold prices as much as it has in the past, it may be because younger residents of India seem to prefer electronics over gold jewelry. In 2017 consumer electronics surpassed gold as the second biggest contributor to India's import bill after crude oil. However, gold imports did increase 54% to $3.97 billion in April.

Russia's 1st quarter gold output rose 13% from the same period in 2018 to 58.12 tonnes. Silver production fell 11% to 223.28 tons.

There are several bullish geopolitical factors lurking under the surface, but the recoveries in gold and silver on Monday weren't particularly impressive, and we could see them drift lower some more until there is an event that sparks aggressive buying.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.