Initial Reaction to The Comey Transcript Takes Gold Prices Lower

Today the former director of the FBI, James Comey, released a written transcript of the prepared opening statement he will make tomorrow in his testimony to the Senate Committee on Intelligence. This seven-page document details the former director’s contact with President Trump, going over his interactions meeting by meeting, phone call by phone call.

His opening statement contains a detailed account of all interactions he had directly with the president. They were created from a series of written memos, written immediately following any direct contact with Donald Trump, either face-to-face or on the phone.

The events and interactions of the former FBI director and the president are extremely well documented, including statements made by both men, as well as the thought process behind Comey’s responses. That being said, the interpretation of this opening statement in regards to whether or not President Trump attempted to obstruct justice is ambiguous enough to allow both sides of the political fence a chance to run with their polarized take on this issue.

According to CNN, in regards as to whether or not James Comey told President Trump on that he was not under investigation, they cited the following written testimony, “I did not tell the President that the FBI and the Department of Justice had been reluctant to make public statements that we did not have an open case on President Trump for a number of reasons, most importantly because it would create a duty to correct, should that change."

However, according to Fox News, Donald Trump was not under investigation, stating that, “Comey said he assured then-President-elect Trump in a briefing at Trump Tower that he was not the focus of the FBI’s Russia investigation.”

While both statements are factually accurate, it is quite obvious that many of our news channels allow their political views to guide their reporting of events.

While it is quite obvious that each political faction has a unique and jaded view on these issues, which seem to be polar opposites of each other, market participants, traders and investors conveyed their take through the eyes of their trades.

Most noteworthy was an almost immediate devaluation of safe haven assets such as gold. Within minutes of Comey’s statement being released today, gold prices fell dramatically. As of 4 o’clock Eastern Standard Time, gold futures are trading at $1288.20, a net loss of nine dollars on the day.

While this could simply indicate that traders are pulling profits after witnessing gold prices rise roughly 5% in the last week, it is also possible that it is signaling the beginning of a correction, following a dramatic price rise from $1215 to the intraday high achieved in yesterday’s trading at $1298.

U.S. equities, which had traded to record highs last week, maintained modest gains between a 10^th and a .25% change on the day. The U.S. dollar traded fractionally higher to unchanged on the day. This occurred after strong selling pressure over the last two weeks which resulted in an almost 4% drop in value on the dollar index.

I think the one certainty that we can establish after reading the written transcripts of tomorrow’s opening statement by James Comey is that there will be a high likelihood of fireworks, knee-jerk reactions, and extreme volatility tomorrow as the financial markets react to this ongoing political turmoil.

Wishing you as always, good trading,