Gold price lower as dollar recovers

The spot gold price fell during Asian trading hours on Monday December 4, coming under pressure from a recovery in the dollar after the US Senate passed its tax reform bill.

The spot gold price was quoted at $1,274.40-1,274.70 per oz as of 04.21am London time, down by $5.65 from last Friday’s close. Trade has ranged from $1,273.95-1,275.95 so far today.

• The dollar rose after the US Senate passed its tax reform bill on Sunday. A House-Senate conference committee will now work to resolve the differences between the House and Senate tax bills.
• “With both bills calling for a reduction in the corporate tax rate to 20%, US tax reform progress is expected to help sustain growth in corporate capital investments and [merger and acquisition] activities,” Credit Suisse said on Monday.
• “The rapid progress and intent on completing the exercise in the [next] two weeks whilst avoiding a government shutdown have had traders scrambling to reassess the [US Federal Reserve’s] interest rate trajectory for 2018. With potentially higher yields, precious metals prices have continued to suffer,” Jeffrey Halley, senior market analyst at Oanda, said.

Silver, PGMs 

• In the other precious metals, the spot silver price dipped by $0.015 to $16.37-16.39 per oz. Platinum slipped $1 to $934-939 per oz while palladium was up by $4 at $1,020-1,025 per oz.
• On the Shanghai Futures Exchange, gold for June delivery was recently at 277.25 yuan ($41.89) per gram, and the June silver contract was at 3,849 yuan per kg.

Currency moves and data releases 

• The dollar index rose by 0.28% to 93.12 as of 04:23am London time. The index had dipped as low as 92.6 last Friday, the lowest since November 27.
• In other commodities, the Brent crude oil spot price fell by 0.49% to $63.30 per barrel at 04:24 London time.
• In equities, the Shanghai Composite was up by 0.12% to 3,321.65.
• In US data from last Friday, final manufacturing PMI for November came in marginally higher at 53.9 from an expected rollover of 53.8. The ISM manufacturing PMI for November was at 58.2, slightly below forecast of 58.4. October construction spending rose 1.4%, higher than expectations of a 0.5% increase. November ISM manufacturing prices disappointed at 65.5 – a reading of 67 was called for.
• Data due later today includes US factory orders, UK construction PMI, and European Sentix investor confidence and producer price index.

 

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