Gold is showing little movement in the Monday session. In the North American session, the spot price for an ounce of gold is $1279.12, down 0.10% on the day. On the release front, there are no US events on the schedule.
The Federal Reserve is in the spotlight, as Janet Yellen’s term as head of the powerful central bank expires in February 2018. President Trump has said he will nominate a new Fed head shortly, and the front runners are economist John Taylor and Federal Reserve Governor Jerome Powell. Taylor advocates a rule in which rates which be as high as 3 percent, given current economic conditions. Powell is more closely aligned to Fed Chair Janet Yellen’s monetary stance which advocates an incremental increase in rates. With the two candidates representing sharply differing views on interest rate levels, Trump’s choice for the new Fed chair could have a significant effect on monetary policy and the strength of the US dollar.
Some rare good news for President Trump translated into losses for gold on Friday. On Thursday, the US Senate passed a $4 trillion budget measure. The bill barely squeaked through, as the vote was 51-49. Still, this is represents a crucial victory for President Trump, who was desperately in need of a legislative victory. The budget measure clears the way for an overhaul reform to the tax code, one of Trump’s key campaign promises. The Republicans are hopeful of passing a new tax code by the New Year, but that could prove overly optimistic, as the Democrats are expected to resist Trump’s tax proposal.
