Gold News: Massive Tax Overhaul Brings Gold Down

Gold News

In the latest gold news: As of December 04 at 9:14am EST, gold was trading at $1274.17 per ounce, remaining constant at a relatively bounded fluctuation rate. At approximately this time last week, gold was trading at $1293.12 per ounce.

gold news

Last week saw a very important moment in current political times occur. U.S. politicians approved a major tax overhaul in the face of the meeting of the Federal Reserve later this month–in which this year’s third tax rate hike is expected. When the U.S. Senate narrowly approved a tax reform bill on Saturday, President Donald Trump was brought closer to his nationwide reform objectives, and investors became cautious on the bullion. Quantitative Commodity Research consultant Peter Fertig stated, “Prospects for large U.S. tax cuts are a negative for gold […] what the Fed does will be very important […] there is a negative influence coming from other commodities like oil, the dollar is stronger and risky assets are up.” In other words, and this is reflected in the prices, gold is expected to head downwards for the next few weeks, especially with the next tax rate hike, which will strengthen the dollar and thus weaken gold. Gold’s prices are nearing four week lows, and even though they were relatively bounded in November–only moving 1% overall on the month–it is likely that the next few weeks will see a price drop off.

When taken in the micro, gold does seem extremely volatile right now. Its trading movement resembles that of less sturdy investments, which easily fluctuate and move extremely reactively to outside factors. However, as mentioned previously, despite all this movement, gold only actually moved 1% on overall for the month of November, despite the various fluctuations. What investors need to keep in mind is that in the face of all of these current political factors having a heavy impact on gold, the bullion is still a long term investment. Thus, the commodity should be traded as such. Having a one to two month outlook on gold is playing with fire in the face of relatively unpredictable political events. The gamblers amongst us might be interested in attempting to play the stakes, however, most investors are looking to quietly wait and see where gold will be headed over the course of the next year and the years beyond. As mentioned in previous articles, gold is expected to go past $1400 by the end of 2018 by many analysts, and although one can never predict with perfect accuracy the next stretch of events, it stands to reason that there is some wisdom in waiting on this one.

This sentiment remains prevalent and is causing the bullion to remain somewhat steady below this year’s high. In the 7-day gold prediction ending November 19, 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 AI: Returns up to 2.41% in 7 Days.” After a week, I Know First’s average percent change came out to 1.76% with XAG as the top earner, bringing in an impressive 2.41% return to investors.


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