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Gold Steadies for Weekly Gain, Benefits from Tax Bill Worries

December 15, 2017 at 15:30 by Andrew Moran

Gold prices are on track for a weekly gain, despite hovering above five-month lows. The yellow metal is benefiting from investor concerns over the Republican tax bill, which has sent the US dollar tumbling.

February gold futures rose $0.90, or 0.07%, to $1,258.00 per ounce at 14:11 GMT on Friday. Gold prices are poised to record a tepid 0.8% weekly gain, but they are trading just above their lowest levels since July. Year-to-date, gold has advanced roughly 10%.

Silver, the sister commodity to gold, is rallying to end the trading week. March silver futures jumped $0.12, or 0.76%, to $16.05 an ounce. The white metal is also getting ready to report a modest weekly increase of 0.2%. Year-to-date, silver has dipped a little more than 1%.

The GOP may have won a key vote in the Senate with its Tax Cut and Jobs Act, but after it was returned to Congress, four more Republican senators have insisted on some changes. Florida Senator Marco Rubio and Utah Senator Mike Lee want to expand the proposed child tax credit. Tennessee Bob Corker is opposed to the tax plan, while Maine Senator Susan Collins is undecided. President Donald Trump has confirmed that he is open to expanding the child tax credits.

Worries over the tax bill sent the US dollar lower as the greenback slipped 0.01%. A weaker US dollar is good for commodities like gold and silver because it makes it cheaper for foreign investors to buy.

On Wednesday, the Federal Reserve raised interest rates for the fourth time in the last 12 months. Gold is generally sensitive to a rising-rate environment because it boosts the opportunity cost and prompts traders to seek out yield-bearing assets.

Experts note that gold is repositioning itself following the US central bank’s monetary policy move. Analysts are expecting spot gold to test a resistance at $1,262, which would lift the next resistance at $1,276.

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