Gold prices held steady near three-week highs on Thursday, as uncertainty over a major U.S. tax reform bill continued to weigh on the dollar
Gold Prices Hold Near 3-Week Highs on Softer Dollar – Gold prices held steady near three-week highs on Thursday, as uncertainty over a major U.S. tax reform bill continued to weigh on the dollar, while geopolitical tensions lingered. Sentiment on the greenback was vulnerable as a U.S. Senate tax-cut bill, which differs from one in the House of Representatives, was set to be unveiled later Thursday. The Washington Post reported on Tuesday that Senate Republican leaders were thinking of postponing the implementation of major corporate tax cuts to comply with Senate rules. Traders are concerned over any potential delays in the implementation of the tax cuts or the possibility that proposed reforms end up being less drastic than hoped for. Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency. Meanwhile, investors remained cautious after U.S. President Donald Trump addressed tensions with North Korea this week. Speaking in South Korea on Tuesday, Trump said that Pyongyang “has interpreted America’s past restraint as weakness” and that “this would be a fatal miscalculation.” The rogue nation responded to Trump’s remarks by calling the U.S. President a “lunatic old man” and saying that the U.S. must remove him from power “to get rid of the abyss of doom.” Markets were also jittery as Saudi Arabia continued to conduct an anti-corruption purgeamong the highest levels of the establishment. After a first crackdown over the weekend, Saudi authorities said on Wednesday that they had made additional arrests and frozen more bank accounts among the kingdom’s political and business elite.
Traders Betting on Bullish Storage Report – The weather driven rally continued on Wednesday with natural gas futures closing higher for a fifth consecutive session. The price action also suggests that aggressive buyers are betting on a bullish storage report on Thursday. The market continued to be supported by forecasts for increased heating demand over the next two weeks. According to data from Platts Analytics’ Bentek Energy, U.S. heating demand hit an eight-month high of 86.9 Bcf/d last Monday and 89.6 Bcf/d last Tuesday. Additionally, resilient power burn levels in both the Northeast and Midwest, where low cash prices and nuclear outages have kept gas economic compared with coal.
EIA Report Indicates Crude Bearish, Products Bullish – U.S. West Texas intermediate and international benchmark Brent crude oil posted a wicked two-sided trade on Wednesday as investors reacted to a surprise government report. According to the U.S. Energy Information Administration, U.S. crude oil stockpiles rose unexpectedly during the week-ending November 3. The move was fueled by a jump in imports and a plunge in exports. U.S. production also hit its highest level since at least 1983. Crude inventories rose 2.2 million barrels versus estimates for a 2.9 million barrel draw down. Gasoline and distillate inventories fell to multi-year lows, even as refining rates rose.
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