Gold prices fell to one week lows on Friday as the dollar gained ground after upbeat U.S. factory orders and service sector data offset the impact of a weaker than expected employment report for October.
• The dollarturned positive after the following data release-
• U.S. factory orders
• ISM non-manufacturing PMI data.
• Another report showed that new orders for U.S. made goods rose for the second straight month in September
• Orders for core capital goods rose more than expected.
The reports raised the probability of the FederalReserve's rate hike at a faster pace in the coming months. Higher rates tend to make the dollar more attractive to yield seeking investors.The dollar had earlier fallen to its lows on Friday after the release of October U.S. nonfarm payrolls, which came in below expectations.
On Monday, the Federal Reserve Bank of New York confirmed that William Dudley, among the most influential monetary policymakers throughout the financial crisis and its aftermath, expects to retire by mid-2018.
That raised another question over leadership at the central bank, less than a week after Trump chose a new Fed chief.
There are a lot of uncertainties over the Federal Reserve which makes it difficult for the markets to trade and hence most of the focus shifts to the tax reforms.
The dollar slipped to a more than one-week low against the yen on Wednesday, pressured by worries over possible delays to President Donald Trump's tax reform plans.
U.S. House of Representatives Speaker Paul Ryan on Wednesday left the door open to a possible delay in implementing a huge corporate tax cut, following a Washington Post report that his fellow Republicans in the Senate are exploring the option.
Any potential delay in the implementation of tax cuts, or the possibility of proposed reforms being watered down, would tend to work against the U.S. currency, analysts said.
Some investors believe the data was distorted by the effects of recent hurricanes in the U.S. Investors were also focused on the proposed tax overhaul outlined by Republican lawmakers on Thursday.
Gold was higher on Thursday as a weaker dollar pushed prices during the session to a three-week high for the second time in successive days.
Gold had gained momentum till Thursday but lost its shineby the end of the week over a strengthening US dollar.
Gold prices closed lower after early weekly strength failed to gain enough upside momentum to continue the move. Bullish traders didn’t seem to be surprised by the release of the Republican version of U.S. tax reform, the Fed dropping hints of a December rate hike in its November monetary policy statement and President Donald Trump’s nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair.
The market traded high for most of the week, but collapsed on Friday after the U.S. Dollar rose in reaction to the October U.S. Non-Farm Payrolls report.
Supporting the market were concerns over political and geopolitical events. Resistance was being fuelled by rising Treasury yields, a firmer U.S. Dollar and strong appetite for higher- risk assets.
Some traders believe tax reforms could bolster growth which would lead to a stronger growing U.S economy , further creating pressure on the Federal Reserve to raise interest rates and this pushing gold prices down.
Though gold still drew short-term support from uncertainty over the U.S. tax bill, “the overall trend has shifted into a neutral to negative trend.
It’s the current geo political and financialuncertaintythat’s creating a negative atmosphere for gold as the year comes to an end. We hope December gets in some great surprises for gold.
• The dollarturned positive after the following data release-
• U.S. factory orders
• ISM non-manufacturing PMI data.
• Another report showed that new orders for U.S. made goods rose for the second straight month in September
• Orders for core capital goods rose more than expected.
The reports raised the probability of the FederalReserve's rate hike at a faster pace in the coming months. Higher rates tend to make the dollar more attractive to yield seeking investors.The dollar had earlier fallen to its lows on Friday after the release of October U.S. nonfarm payrolls, which came in below expectations.
On Monday, the Federal Reserve Bank of New York confirmed that William Dudley, among the most influential monetary policymakers throughout the financial crisis and its aftermath, expects to retire by mid-2018.
That raised another question over leadership at the central bank, less than a week after Trump chose a new Fed chief.
There are a lot of uncertainties over the Federal Reserve which makes it difficult for the markets to trade and hence most of the focus shifts to the tax reforms.
The dollar slipped to a more than one-week low against the yen on Wednesday, pressured by worries over possible delays to President Donald Trump's tax reform plans.
U.S. House of Representatives Speaker Paul Ryan on Wednesday left the door open to a possible delay in implementing a huge corporate tax cut, following a Washington Post report that his fellow Republicans in the Senate are exploring the option.
Any potential delay in the implementation of tax cuts, or the possibility of proposed reforms being watered down, would tend to work against the U.S. currency, analysts said.
Some investors believe the data was distorted by the effects of recent hurricanes in the U.S. Investors were also focused on the proposed tax overhaul outlined by Republican lawmakers on Thursday.
Gold was higher on Thursday as a weaker dollar pushed prices during the session to a three-week high for the second time in successive days.
Gold had gained momentum till Thursday but lost its shineby the end of the week over a strengthening US dollar.
Gold prices closed lower after early weekly strength failed to gain enough upside momentum to continue the move. Bullish traders didn’t seem to be surprised by the release of the Republican version of U.S. tax reform, the Fed dropping hints of a December rate hike in its November monetary policy statement and President Donald Trump’s nomination of Federal Reserve Governor Jerome Powell to be the next Fed chair.
The market traded high for most of the week, but collapsed on Friday after the U.S. Dollar rose in reaction to the October U.S. Non-Farm Payrolls report.
Supporting the market were concerns over political and geopolitical events. Resistance was being fuelled by rising Treasury yields, a firmer U.S. Dollar and strong appetite for higher- risk assets.
Some traders believe tax reforms could bolster growth which would lead to a stronger growing U.S economy , further creating pressure on the Federal Reserve to raise interest rates and this pushing gold prices down.
Though gold still drew short-term support from uncertainty over the U.S. tax bill, “the overall trend has shifted into a neutral to negative trend.
It’s the current geo political and financialuncertaintythat’s creating a negative atmosphere for gold as the year comes to an end. We hope December gets in some great surprises for gold.
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