Nervous Investors Push Gold Prices Higher

Gold extended its two-week rally on Monday as spooked investors sought cover following the failure of congressional Republicans and President Donald Trump to repeal Obamacare and pass a new health care law.

Gold has rallied more than 4.5 percent since March 15, moving from less than $1,200 an ounce to more than $1,255. If Monday’s gains hold, the precious metal will finish the day with its eighth gain in the past nine days.

Trump has made clear since he took office that repealing and replacing the Affordable Care Act was his top legislative priority. However, the failure of the health care bill now has investors concerned about Trump’s ability to rely on a splintered Republican Party to follow through on promises of corporate deregulation and tax reform.

Gold has been exceptionally streaky since it hit its late-February high of $1,264 an ounce. Gold logged nine consecutive losses in the weeks leading up to the Federal Reserve’s rate hike decision. Rising interest rates are typically considered bad news for gold. But NationsShares CIO Scott Nations says inflation may be even more important than interest rates.

“The rally makes a lot of sense only if you’re worried about inflation,” Nations says. “If you’re thinking inflation is going to increase more than rates, and it now seems like Janet Yellen would be fine with that, then buying gold makes all the sense in the world.”

Earlier this month, Bank of America predicted…

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