Headlines this week: miners weaker, gold stronger. With the world economy generally on the up, this seems like strange moves for markets to be making.
Until, that is, the political context is taken into account– the tension between fundamentals and sentiment is set to be even more pronounced as 2017 progresses.
The most obvious sign of this has been upward movements in gold. Gold pushed on past US$1,240 this week even as the US dollar weakened and then recovered against a basket of currencies.
The reason? - sentiment.
Panicky mainstream media continues to paint a picture of instability in the White House, with the Huffington Post reporting on a President roaming around in his bathrobe at night-time phoning the wrong people for advice about the pricing of the US dollar, and watching too much cable TV.
Reports that Trump tweets angrily can hardly be denied. Nor that immigration restrictions have been put in place.
But is it true that President Trump has requested that all written briefings be kept to a minimum of one page, and that the bullet point format is preferable, but with a maximum of nine bullet points to a page?
That’s harder to know. It could just be fake news. But even if it were true, would it matter?
That’s also hard to know. How much power does he really have? Is Steve Bannon really pulling the strings? Or, looking at it from another angle, will the judiciary and the legislative assert their combined might in the US political system and stymie a President whose unpredictability is his hallmark.
Markets, as we know, hate uncertainty.
So it’s in this context that a certain febrile volatility has crept back into trading and gold has hit a three month high.
Will Special Forces really go into Mexico to fight the cartels? That would be too much of an echo of Tom Clancy, surely. On the other hand, there was the Iran-Contra affair under Reagan, and America is still split on that one - no surprises where the fault lines lie and which networks still host Oliver North regularly.
No surprise either that circulation of journals publishing serious news and analysis is starting to rise again. People are tiring of the instant media frenzy and beginning to seek a deeper understanding of what's going on.
So is this mild flight to gold the start of a much greater trend, already being amplified by reports of high net worths buying up boltholes with airstrips in New Zealand? Or will it fizzle as the normal ebbs and flows of global economic power begin to reassert themselves?
After all, in spite of the media storm surrounding Trump, some markets are now moving on. Copper is US$100 better in recent days, and not because of anything Trump or the US economy is doing.
Rather, striking workers at the Escondida mine in Chile are likely to be able to curtail global supply significantly, since it’s one of the world’s largest. That’s creating a positive environment for other copper companies, such as Aisamet (LON:ARS), which put out drilling results this week.
Asiamet’s shares jumped by nearly 10% in early trade as the price hit a two-year high.
Like other peers Freeport McMoRan (NYSE:FCX) and Glencore PLC (LON:GLEN) Rio too is just coming off a two year high, part of a trend that began before pundits were taking a Trump victory even remotely seriously, and part of trends – probably - that will continue long after he’s gone.
What remains to be seen is whether there will be an inverse relationship between the Trump Presidency and the gold price. So far, the signs are that there will. But in spite of all the media harrumphing, things are starting slowly.
If he seriously wants to weaken the dollar, then gold will soar. But it will take more than a 3am phone call to the wrong man to make that happen.