Global gold prices down but linger near three-week high amid US tax concerns
Gold prices eased on Friday on a firmer dollar but uncertainty over US tax reforms helped prices stay close to a three-week high touched in the previous session. Bullion was on track for its first weekly gain in about a month.
Spot gold was down 0.1% at $1,283.61 per ounce as of 2.26pm, although it was headed for a gain of more than 1% for the week. On Thursday, it touched its highest since 20 October at $1,288.34 an ounce. US gold futures for December delivery were down 0.3% at $1,284.20.
“Gold has struggled to gain any momentum this week despite the US tax reform hitting a few hurdles,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank. A slightly stronger dollar has weighed on prices on Friday, he said.
The dollar index, which weighs the greenback versus a basket of major currencies, was up 0.1%, though still on track for a weekly loss, pressured by developments surrounding the tax bill put forth by US Senate Republicans.
The Senate tax plan differed from a US house of representatives’ version on several key fronts, including how they treat the corporate tax rate, the tax deduction for state and local taxes, and the estate tax.
“Further political uncertainty in the US saw gold prices well supported. News that the Republican tax plan involved cuts being delayed until 2019 raised the ire of investors,” ANZ said in a note.
The appointment of Jerome Powell as the new US Federal Reserve chair has watered down expectations of a more hawkish stance from the central bank, and that is supportive of gold, said Mark To, head of research at Hong Kong’s Wing Fung Financial Group. “Overall though, the picture (for gold) is range-bound trading without much changes,” To said.
Spot gold may edge up to a resistance at $1,292 per ounce, a break above which could lead to a gain to $1,299, according to Reuters technical analyst Wang Tao.
In other precious metals, palladium slipped 0.1% at $1,010.50 an ounce after touching its highest since 2001 at $1,026.10 on Thursday. It was up about 1.4% for the week. Silver rose 0.1% to $17.01 per ounce. It has gained 1.1% for the week and is on track for its first weekly rise in four. Platinum was down 0.2% at $935 an ounce after hitting a near four-week high of $939.30 on Thursday. It rose about 1.6% for the week. Reuters