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What’s next? – GOLD 21.12.17

Dec 21 2017, 01:16 PM (+06) | Fortfs.com

Gold futures were higher in early trading hours on Thursday, as traders continued to digest the approval of the tax reform in the United States.

 

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.11 percent at $1.271.00 a troy ounce as of 05:05 GMT.

 

The yellow metal settled in green territory on Wednesday as the US dollar extended loses while House Republicans looked ahead to a re-vote on the tax reform following a Democrat-engineered technical delay.


House Republicans were able to pass a long-awaited tax bill, which now will pass to President Donald Trump’s desk for final approval.

 

On the data front, existing home sales in the US rose 5.6 percent in November to a seasonally adjusted rate of 5.81 million units.

 

Gold headed for a second-weekly gain after recovering from a three-week losing streak.

 

However, investment bank Goldman Sachs said the metal could drop back to $1,200 a troy ounce by mid-2018 as the tax reform is seen boosting economic growth and inflation levels in the United States.

 

Goldman’s bearish forecast on bullion prices might open the doors to a downward extension in the near term.

 

Gold is very sensitive to interest rate moves in the US. Higher rates dampen demand for safe havens as they lift the opportunity cost of holding non-yielding assets.

 

The Commodity Futures Trading Commission said last week that hedge funds and money managers reduced their net long positions in COMEX gold contracts to 170,100 from 173,300 in in the week to December 12.

 

Ahead in the day, attention will be directed to a revision of the third-quarter gross domestic product and initial jobless claims as of 13:30 GMT.

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