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Saturday, November 27, 2021

Gold Prices Trade Higher on Tax Overhaul Jitters

Gold Prices Trade Higher on Tax Overhaul Jitters© Reuters.

Investing.com – Gold prices rose on Monday amid an uptick in safe-haven demand as investor uncertainty over the outcome of tax reform continued while a slump in sterling boosted the dollar which capped gains in the precious metal.

for December delivery on the Comex division of the New York Mercantile Exchange rose by $5.18, or 0.41%, to $1279.37 a troy ounce.

The House of Representatives is expected to vote this week on a major tax reform bill amid uncertainty over the outcome of the bill after the head of the House of Represents’ tax-writing committee said on Sunday he would not accept elimination of a federal deduction for state and local taxes.

With a 52-seat Senate majority, Republicans can only afford to lose two GOP senators – as Democrats are widely expected to vote no – , but Vice President Pence would have to break a tie.

Uncertainty over the progress of a Republican has weighed on the dollar, helping gold prices snap its three-week losing streak on Friday but traders expect the precious metal to make its next significant move higher or lower when the Fed members meet in December.

“I think some movement will come closer to the next Federal Reserve meeting in December,” Capital Economics analyst Simona Gambarini said. “Most markets expect a rate hike … that could be what prompts [gold] prices higher or lower, depending on what happens.”

Also lifting sentiment on safe-haven demand were reports that British Prime Minister Theresa’s Conservative party had agreed to sign a letter of no-confidence in her as some members doubted Mrs. May ability to lead the UK into a successful Brexit. Rising UK political uncertainty pressured sterling to one-week lows and supported a move higher in the dollar, capping gains in the gold futures.

Gold prices are sensitive to moves higher in the U.S. dollar – A higher dollar makes gold more expensive for holders of foreign currency, thus, reduces demand.

In other precious metal trade, rose 0.99% to $17.04 a troy ounce, while rose 0.34% to $935.30.

traded at $3.12, up 1.43% while fell by 1% to $3.18.

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Source: Investing.com

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