Gold price sputters but will hold week’s advance

November 10, 2017

New York (Nov 10)  Gold struggled on Friday to extend the three-week highs it scored earlier this week even as both stocks and the dollar, which typically move inversely to precious metals, also dipped in the red amid lost confidence for economy-boosting tax reform.

December gold GCZ7, -0.18% slipped $2.50, or 0.2%, to $1,285 an ounce. Its finish Thursday at $1,287.50 was the highest since Oct. 16, according to FactSet data. The exchange-traded SPDR Gold Trust GLD, -0.11%  eased 0.1% premarket.

For the week, however, gold futures are headed for a roughly 1.2% gain “as the U.S. dollar declined [late week], increasing the appeal of anti-fiat assets epitomized by the yellow metal after the Senate’s tax cut proposal underwhelmed,” said Ilya Spivak, currency and commodity strategist with Daily FX.

“Lawmakers must now try to reconcile this offering with the one emerging from the House. This hints at seesaw volatility ahead as Fed rate hike bets oscillate with incoming headlines from Washington,” he said.

Concerns that divergence between two bills could substantially stall the implementation of tax cuts and other tax-code changes have weighed on U.S. Treasury yields TMUBMUSD10Y, +0.00%  as well as on the dollar’s performance, all to the benefit of gold.

The ICE U.S. Dollar Index DXY, -0.08% which measures the buck against six rivals, fell 0.1% to 94.48 early Friday. The index fell sharply Thursday, logging its biggest decline since Oct. 10, according to FactSet data. The index and gold typically move inversely, as a firmer dollar makes gold less attractive to investors using another currency.

In other metals, silver for December delivery SIZ7, +0.38%  gained 5 cents, or 0.3%, to $17.025 an ounce. The exchange-traded iShares Silver Trust SLV, +0.06%  was down less than 0.1%.

Palladium pulled back slightly from the 16-year highs hit this week. The December contract PAZ7, -0.53%  fell $3.10, or 0.3%, to $1,001.30 an ounce. It settled Wednesday at $1,015.85 an ounce—the highest since February 2001


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