Gold rides on US tax cut plan fears

Business World - - WORLD MARKETS -

NEW YORK/LON­DON — Gold rose on Wed­nes­day, hov­er­ing near a three-week high as the dol­lar re­treated on ex­pec­ta­tions of pos­si­ble de­lays in long-awaited US tax re­forms, while pal­la­dium hit its high­est since 2001.

Spot gold was up 0.60% at $ 1,283.20 an ounce by 2:00 p.m. EST (1900 GMT). US gold fu­tures for De­cem­ber de­liv­ery set­tled up $7.90, or 0.60%, at $1,283.70 per ounce.

US House of Rep­re­sen­ta­tives Speaker Paul Ryan left the door open to a pos­si­ble de­lay in im­ple­ment­ing lower tax rates for cor­po­ra­tions, fol­low­ing a me­dia re­port that his fel­low Se­nate Repub­li­cans were ex­plor­ing the op­tion.

US eq­ui­ties fell and the dol­lar in­dex, which mea­sures the green­back against a bas­ket of six cur­ren­cies, dipped 0.10% to­ward three-and-ahalf month lows touched in re­cent weeks.

“The closer we get to the in­ter­est rate hike in De­cem­ber the lower the price of gold should get,” said Natixis pre­cious met­als an­a­lyst Bernard Dah­dah.

A De­cem­ber in­ter­est rate hike has been priced into the mar­ket, traders said.

But a po­ten­tial de­lay in the tax plan could mean a mod­er­a­tion in in­ter­est rate in­creases next year, which could sup­port gold, they noted.

“If (Repub­li­cans) can’t get some­thing done, you could see more of a bid come back into gold,” said Josh Graves, se­nior mar­ket strate­gist at RJO Fu­tures in Chicago.

Ris­ing US in­ter­est rates tend to boost the dol­lar and lift the op­por­tu­nity cost of hold­ing non-yield­ing as­sets such as gold.

In phys­i­cal de­mand, in­dus­try off icials and an­a­lysts warned that In­dia’s gold im­ports in the last quar­ter of 2017 could drop 25% from a year ago due to weak de­mand dur­ing key fes­ti­vals and as in­vestors seek better re­turns from riskier as­sets like eq­ui­ties.

In other pre­cious met­als, pal­la­dium was up 2.40% at $1,016 an ounce, sil­ver in­creased by 0.90% at $17.11 an ounce while plat­inum rose by 1.20% at $933.60 an ounce. —

Newspapers in English

Newspapers from Philippines

© PressReader. All rights reserved.