Gold News: Tax Reform Uncertainty Brings Gold Back From Drop
Gold News
In the latest gold news: As of November 13 at 10:01am EST, gold was trading at $1277.40 per ounce, remaining constant at a relatively bounded fluctuation rate. At approximately this time last week, gold was trading at $1271.66 per ounce.
Late last week there was a drop in the price of gold, as it fell 0.7% on Friday. This was its biggest one day drop since October 26th. This occurred due to a rise in the U.S. Treasury bond yields. However, gold recovered upon the market opening on Monday due to uncertainty over a U.S. tax reform plan. This led to a push for risk averse action, and more investors took to gold and increased their position. There is still, however, much uncertainty over movement in the next few months and investors have remained relatively stable on the bullion. This means that gold has remained somewhat hemmed in by a tight range, sitting often around its 100-day moving average. Investors look to December when the Federal Reserve plans a third interest rate hike to decide what further action will be taken. Gold has received contrarian predictions on both sides of the movement from various analysts and it remains to be seen how the long-term view will pan out.
In review, this year has been marked by various forces going head to head to control gold momentum. Months earlier, the most pertinent of these was the geopolitical tensions between the U.S. and North Korea which led to massive spikes in gold prices. However, this has been tempered over time by a strong American dollar and the expectation of rising U.S. interest rates. Currently, many investors don’t foresee any drastic movement over the next few months. Jeffrey Halley, a senior market analyst with OANDA recently stated, “The sell-off [which occurred on Friday] underlines the sensitivity of gold to the U.S. yield curve and further emphasizes that the safe-haven premium in the gold price is mainly non-existent at the moment”. Halley’s remarks echo a similar sentiment in recent analyses, which is that the bullion is currently trading like a paper good, and despite many’s belief in using it as a safe-haven whenever worrying events occur, it is in fact merely the illusion of a safe-haven. Gold’s current trading is far too temperamental and dependent on the dollar to be considered an actual safe-haven.
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.
