Gold has posted slight losses in the Monday session. In North American trade, the spot price for an ounce of gold is $1275.52, down 0.34% on the day. On the release front, ISM Manufacturing PMI accelerated to 60.8, beating the forecast of 57.9. This marked the indicator’s highest level since April 2011.
The US manufacturing sector remains strong, as a stronger global economy has led to increased demand for US goods. The primary gauge of manufacturing activity, ISM Manufacturing PMI, accelerated in September to 60.8, indicating sharp expansion. The strong reading increased has sent gold prices lower on Monday. September was a rough month for gold, which declined 3.2 percent. With the North Korean conflict again on the back burner and the US continuing to post strong numbers, investors have a renewed appetite for riskier assets, which has weighed on safe-haven gold.
The US dollar gained some ground last week from an unexpected source – President Donald Trump. Trump has all but given up on his health care proposal, as the plan lacks enough support from Republican lawmakers. Next on the Trump Express is tax reform, which was a key campaign plank. Last week, Trump proposed a major overhaul of the US tax code, which includes reducing the corporate tax rate from 35 percent to 20 percent, as well as a 25 percent tax rate for small businesses, such as partnerships. Like other Trump proposals, the tax plan was sketchy on details, including how the tax plan would be paid for. With Democrats and some Republicans wary of Trump’s tax agenda, it’s likely his that tax reform proposal will face a stiff battle in Congress. Still, the markets like the idea of lower taxes, and this has helped the dollar gain ground against gold.
