Gold Gains Slightly In Asia As China Market Concerns Ease, US Tax Cuts Eyed

Investing.com – Gold prices gained slightly in Asia on Friday as concerns over a sharp selloff in China overnight eased and investors turned focus to the U.S. and next week’s Senate review of proposed tax cuts.

Comex gained 0.06% to $1,292.98 a troy ounce. On Thursday, China CSI 300 Index sank 52 points in the final 45 minutes of trading, the steepest afternoon decline since the depths of China’s stock market crash in January 2016.

Overnight, gold prices held steady in holiday-thinned trade on Thursday, after the minutes of the Federal Reserve’s most recent policy meeting pushed the U.S. dollar, lending support to the precious metal.

Trade volumes were expected to remain light on Thursday, with Comex floor trading scheduled to remain closed for Thanksgiving. An abbreviated session was slated for Friday.

The greenback weakened after the minutes of the Fed’s latest meeting showed that some policymakers remain concerned over persistently low inflation.

The report also showed that the Fed expects to raise interest rates in the “near term”, adding to expectations for a December rate hike. However, the central bank added that economic data will determine the timing of future rate hikes, which could mean a slower pace than expected for 2018.

Gold is sensitive to moves in both U.S. rates and the dollar. A weaker dollar makes gold less 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.

Another factor for rate hikes is whether the US Congress manages to pass a tax package this year, with a U.S. House of Representatives version and one in the Senate at odds on key points.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.