Gold prices rise after US Senate passes tax bill

Gold prices rose for a fourth day on Wednesday as expectations that the US government will enact the country’s biggest tax reforms in 30 years held the dollar steady.
Gold has risen more than 2 percent from a five-month low of $1,235.92 on Dec. 12, helped by a weakening dollar that makes gold cheaper for holders of other currencies.
However, market players are expected to be wary of taking new positions before the holiday season and prices are on track to register their narrowest trading range of any quarter in a decade in the last three months of 2017.
“Gold is coming up from a cyclical bottom. It’s going to get quieter due to the upcoming holiday long-weekends,” said Mun Chun Loh, director, Private Wealth at GoldSilver Central Pte Ltd. in Singapore.
Spot gold was up 0.2 percent at $1,264.52 an ounce at 1009 GMT while US gold futures were 0.3 percent higher at $1,267.70 an ounce.
The dollar has slipped from a one-month high earlier this month but was steady on Wednesday after the Republican-led US Senate approved a sweeping $1.5-trillion tax bill that could boost US economic growth.
Markets were however looking ahead to Friday by which time Congress must pass a temporary spending bill to avoid a government shutdown, said INTL FCStone analyst Edward Meir.
Holdings of the world’s largest gold-backed exchange-traded fund, New York-based SPDR Gold Shares , fell 1 percent over Monday and Tuesday to the lowest level since early September.
But low prices have spurred demand for physical gold in China, with local premiums approaching $11, said MKS PAMP trader Sam Laughlin. Goldman Sachs said in a note it expected gold prices to fall further and reach $1,200 an ounce by mid-2018.
“We see the decline in gold as evidence that “fear” effects, which had been keeping gold supported, have at least partially moderated as US tax reform and the transition to a new Fed chair appear to be going smoothly,” it said.
On the technical side, resistance was at the 200-day moving average at $1,269.15 an ounce and momentum indicators suggested gold would continue to rise if it remained above a fibonacci level of $1,260.50, said analysts at ScotiaMocatta in a note.
Among other precious metal prices, silver was unchanged at $16.12 an ounce. Platinum was up 0.3 percent at $916.30 an ounce and palladium was also 0.3 percent higher, at $1,025.22.

Source:Arabnews