• Gold prices were ending the U.S. day session slightly lower and fell to a two-week low Wednesday. World stock markets paused at mid-week, after the good early-week gains. However, traders and investors worldwide are still in an upbeat mood, which is bearish for safe-haven gold.
• Gold has recovered from a two-week low in a late-day move, buoyed by short-covering as US Treasury yields turn lower and the US dollar pares gains after President Donald Trump proposes slashing the US tax rate on corporate profits.
• Trump proposed cutting the corporate and pass-through business profits tax rate to 15 per cent from 35 per cent or more, as well as offering tax cuts to average Americans in a rough outline of his tax policy goals.
• Spot gold was up 0.3 per cent at $US1,266.81 an ounce by 3:10 pm Wednesday EDT (0510 Thursday AEST). Earlier in the session prices hit $US1,259.90, their weakest since April 11.
• "Gold rallied to session highs on short-covering after the key $US1,260 level held multiple times today amid lingering concerns that tax reform could balloon deficits," said Tai Wong, director of base and precious metals trading for BMO Capital Markets in New York.
"However, tax reform's impact on asset prices and gold could be transitory since the final version of any bill is likely to look starkly different and unlikely to be introduced for months.
" The late-day move higher came after bullion spent much of the session little changed.
• "The reason we're pausing here is people are trying to figure out what's going to happen with the US economy and rates," said Brad Sanderson, analyst at Cohen & Steers in New York. Gold prices are down more than 2 per cent from last week's five-month high as risk appetite increased on easing geopolitical concerns.
• "You had a decent set of risk factors that supported gold over the past few weeks and I'd argue that most of them are priced out of the market again," said Carsten Menke, analyst at Julius Baer in Zurich.
"That's why we believe that prices should reach $US1,200 over the next three months."
• Technically, June gold futures prices closed near mid-range today. Bulls are fading as a five-week-old uptrend on the daily bar chart has been negated. The gold bulls still have the slight overall near-term technical advantage but need to show fresh power soon to keep it. Gold bulls' next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,300.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at $1,250.00. First resistance is seen at $1,275.00 and then at this week’s high of $1,280.00. First support is seen at today’s low of $1,262.30 and then at 1,250.00. Wyckoff's Market Rating: 5.5
Reference: Kitco, Business News
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