While the dollar has been trading near its lowest since November, funds have found refuge in gold. On Wednesday, SPDR Gold Shares (GLD) had the highest daily inflow in seven months, at $487 million. Fund managers see that there’s more to it that than just the 11% advance this year in gold.

As currency trading has been plagued with risk, investors have found stability in gold, which has not experienced dramatic price swings. A number of world events that have increased political risk have been the catalyst for funds going long on bullion, such as tensions between the United States and North Korea, the delay of the Trump tax plan, the dropping of the “Mother of All Bombs” in Afghanistan, uncertainty over Brexit after Theresa May triggered Article 50, and the French election.

It is unclear what is going to happen after the U.S. signaled that “strategic patience has ended” with North Korea, but we will have an answer to some of the other questions very soon. Trump’s tax plan is expected to be unveiled on Wednesday and it is said that Trump will announce cutting corporate taxes to 15% from 35%. Secretary of Treasury Steven Mnuchin told reporters the bill would pay for itself with economic growth. This could take interest away from gold.

U.S. government funding expires on Friday and it remains to be seen whether there will be an encore to the 2013 government shutdown. Look for more gold trading if Washington creates more problems.

On the other hand, the outcome of the French election means a drop in prices in gold and a good Monday for markets. Gold futures fell to $1,271.10 on April 24, the day after pro-growth, pro-EU French presidential candidate Emmanuel Macron came out on top of the first round of the country's voting. In Europe, STOXX 600 reached its highest levels since August 2015 and in the U.S. markets also rose with both S&P 500 and Dow posting gains. Macron will face anti-EU, far-right leader Marine Le Pen in a runoff on May 7.

However, bullion may lose its appeal if the Fed will stay on course with its plans to increase interest rates. Investors are betting on just one more increase in December, but Dallas Fed President Robert Kaplan told Bloomberg TV in an interview in April that three rate increases for this year are still a good baseline. If borrowing costs increase, gold will lose its luster because it becomes less competitive against bonds.

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