As expected, the gold price has struggled to regain the $1,300 level last week, but it won’t stay below that price for long…
After reaching a monthly high of $1,305 on Friday, Oct. 13, the metal fell 1.8% last week to close at $1,281 on Friday, Oct. 20.
Sentiment toward gold prices is badly bruised as stocks continue to make new highs, causing interest in precious metals to wane. The Dow Jones Industrial Average closed at new record highs every trading session last week, gaining 1.9% over the five-day period.
Although the U. S. dollar has been mostly sideways for the past month, it has regained some strength in the past week. The U. S. Dollar Index (DXY) – which tracks the dollar against the euro, Swiss franc, and other currencies – is up from 93.09 on Oct. 13 to 93.90 today (Monday, Oct. 23).
Part of the dollar’s rally comes from renewed talk of passing U. S. President Donald Trump’s promised tax cuts. Last Friday, the GOP-controlled Senate approved a budget measure that would let Republicans start drawing up a tax-cut plan without support from Democrats.
In my view, the price of gold will likely stagnate over the next few weeks. News around the tax cuts and the 91.7% chance of a December rate hike should support the dollar and stocks, attracting money away from the gold market.
This post was published at Wall Street Examiner on October 23, 2017.
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