Gold Prices Retreat After Monday’s Rally
Gold prices edged lower in early trade on Tuesday, as investors sold the yellow metal to lock in profits following the nearly one percent gain in the previous session.
Comex gold futures slipped around $4.00, or 0.3%, to $1,277.33 a troy ounce by 3:45AM ET (0845GMT).
The yellow metal climbed 1% on Monday, the biggest percentage gain in about six weeks, as safe-haven buying picked up on concerns over corruption arrests that targeted royal family members and ministers in Saudi Arabia.
The weekend purge included a wave of arrests of Saudi Arabian princes, businessmen and government ministers in what has been billed as an anticorruption crackdown but is seen by some as a consolidation of power by Crown Prince Mohammad bin Salman.
Meanwhile, U.S. tax reform will also likely be at the back of investors’ minds Tuesday, as markets look for any new developments.
Tax negotiators in the House of Representatives will seek to overcome their differences this week and work on a plan, aiming for their self-imposed deadline of passage this month.
Some traders believe tax reforms could bolster growth, adding pressure on the Federal Reserve to raise interest rates, known as the “Trumpflation” trade.
The U.S. central bank is scheduled to hold its final policy meeting of the year on Dec. 12-13, with interest rate futures pricing in a 100% chance of a rate hike at that meeting, according to Investing.com’s Fed Rate Monitor Tool.
Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.
Elsewhere on the Comex, silver futures lost 18.9 cents, or 1%, to $17.04 a troy ounce. Among other precious metals, platinum shed 0.6% to $928.95, while palladium slumped 0.3% to $992.12 an ounce.
Meanwhile, copper futures declined 2.0 cents, or 0.7%, to $3.137 a pound.
Article from Investing.com