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Gold Futures Hold Onto Gains Amid U.S. Tax Reform Uncertainty

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November 13th, 2017
 
Gold held onto gains on Monday, as ongoing uncertainty over the fate of a major U.S. tax reform bill continued to dampen demand for the dollar.

Comex gold futures were up $3.75 or about 0.29% at $1,277.80 a troy ounce by 08:25 a.m. ET (12:25 GMT).

Senate Republicans unveiled a tax plan on Thursday that differed from the one crafted by House Republicans, highlighting the challenges to reconciling the differences between the two plans with just a short time before the year-end deadline they have set to pass it.

Hopes of tax reform have helped boost the dollar since mid-September. Some traders believe tax reforms could bolster growth, adding pressure on the Federal Reserve to raise interest rates, known as the "Trumpflation" trade.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.32, just off Friday's one-week low of 94.16.

Market players were also eyeing a number of U.S. economic reports due throughout the week and especially Wednesday's inflation data, for fresh clues on the Federal Reserve's next policy moves.

Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.

Elsewhere on the Comex, silver futures were little changed at $16.87 a troy ounce.

 - Investing.com.

 

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Gold futures gained in New York as concern about slowing growth drove equities lower and boosted demand for the metal as an alternative investment.