Gold News: Bullion Looks To Play Long Game In Light of Tax Reform
Gold News
In the latest gold news: As of October 30 at 10:56am EST, gold was trading at $1273.18 per ounce, remaining constant at a relatively bounded fluctuation rate. At approximately this time last week, gold was trading at $1274.81 per ounce.
As it stands, the nation is currently considering massive tax reforms which would have large repercussions across various industries. For example, many analysts believe that the tax plan being considered in Congress would inflate the nation’s budget deficit, and expand the debt. Given the nation’s current fiscal standing, this is a prime situation for stronger gold and silver prices. However, in the current financial environment, many analysts also believe that gold is being traded as a paper commodity, in the sense that it is lightly being exchanged and fluctuating solely based on the dollar momentum. Thus, given the delay in implementing any type of fiscal policy, investors do not believe that gold will significantly go up until Q2 of next year. This means a continuous fluctuation of prices along the next few months, with a possible drop due to another interest rate hike in December.
Given the time frame described above and the current momentum of gold, we find that many analysts predict that gold will climb back past the psychological ceiling of $1300. ABN Amro believes this will happen within the first few months of 2018, followed by an increase in prices on average throughout the year, resulting in a high of approximately $1450 on average when approaching the end of 2018. As always, there is also the unpredictable factor of geopolitical tensions which might lead to an increase in gold purchases. Previously this has led to significant movement, however, it is still part of the “paper commodity” trading phenomenon which many investors describe as a reason to stay long gold and avoid getting caught in the quick movement. There is, of course, hope that there will be no significant geopolitical situation which would semi-permanently prop up gold prices, as the consequences of this would far outweigh any profit made off a trade of gold rising as a result.
This sentiment remains prevalent and is causing the bullion to remain somewhat steady below this year’s high. In the 90-day gold prediction ending September 16, I Know First’s algorithm based on a stock prediction algorithm showed an impressive 100% accuracy rate, as seen in “Gold Price Predictions Based on Deep Learning: Returns up to 5.24% in 3 Months.” After a month, I Know First’s average percent change came out to 5.22% with XAU as the top earner, bringing in an impressive 5.24% return to investors.
