Gold has posted considerable gains in the Wednesday session. In North American trading, the spot price for an ounce of gold is $1290.71, up 0.79% on the day. On the release front, durable goods reports were a mix. Core Durable Goods Orders gained 0.4%, matching the forecast. However, Durable Goods Orders declined 1.4%, well of the forecast of a 0.4% gain. The UoM Consumer Sentiment report came in at 98.5, above the forecast of 98.2 points. Later in the day, the Federal Reserve releases the minutes of its November policy meeting.
The markets are keeping an eye on the Federal Reserve, which will release the November minutes later in the day. In October, the Fed announced that it would taper its balance sheet, and those reductions of $10 billion commenced around the time of the November meeting. The odds of upcoming rate hikes remains very high, with fed futures priced in at 91% and 89%, respectively. If the minutes reinforce the market perception that more markets are just around the corner, the US dollar could gain ground.
As President Trump’s tax reform bill winds it way through Congress, gold prices have been fluctuating and traders can expect this to continue when the Senate votes on its version of the bill after Thanksgiving. On Monday, gold prices jumped 1.4%, erasing the losses seen on Friday. President Trump won a major legislative victory when the House of Representatives passed a tax reform bill. 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.
