Gold has posted sharp losses in the Monday session. In North American trading, the spot price for an ounce of gold is $1277.84, down 1.2% on the day. On the release front, the sole event is CB Leading Index. The indicator gained 1.2%, well above the forecast of 0.6%. On Tuesday, the US will publish Existing Home Sales. As well, US Federal Reserve Chair Janet Yellen will speak at an event in New York City.
There was good news from US construction numbers on Friday. Building Permits for single-family homes jumped to 1.30 million, above the estimate of 1.25 million. The annualized pace of 839,000 building permits in October was the fastest since September 2007. Housing Start also sparkled, accelerating to 1.29 million, compared to an estimate of 1.19 million. The catalyst for the strong numbers were hurricanes Harvey and Irma, which caused massive damage in the southern part of the US. With rebuilding efforts well underway, construction numbers should remain strong in the fourth quarter.
As investors keep a close eye on tax reform, gold prices continue to fluctuate. Gold prices jumped 1.2% on Friday, only to surrender those gains on Monday. President Trump won a major victory on Thursday, as the House of Representatives passed its version of the tax bill, by a vote of 227-205. However, with the vote largely based on party lines, Republicans will have a tougher battle passing the Senate version of the bill, as the Republicans have a slim majority of 52-48. The tax legislation provides major tax relief and cut corporate taxes from 35% to 20%, and if Congress does enact a new tax code, the US dollar could make strong gains, at the expense of gold.
