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Gold Prices May Ignore Vote Passing US Tax Cut Plan

Gold Prices May Ignore Vote Passing US Tax Cut Plan

Ilya Spivak, Head Strategist, APAC

Talking Points:

  • Gold prices may look past final US Congress vote to pass tax cut legislation
  • Crude oil prices remain locked in familiar range, EIA inventory data due ahead
  • Have a question about trading commodities? Join a Q&A webinar to ask it live

Commodities made little headway yesterday. Gold prices seemed unimpressed after the US House of Representatives passed a Republican-led tax reformplan. Meanwhile, crude oil prices shrugged at API data showing raw material stocks shed 5.2 million barrels while gasoline storage added 2 million barrels.

Looking ahead, a final vote is expected to clear the way for tax cut legislation to be sent off for President Donald Trump’s signature. That may be priced in already however and might pass without much of a response from financial markets.

Official EIA inventory flow statistics are also due. Forecasts envision a 3.5 million barrel draw from crude stockpiles and a 1.7 million barrel gain gasoline reserves. That seems to be broadly aligned with API estimates, so the markets response might be muted absent a major deviation from the consensus view.

What are the forces driving long-term crude oil price trends? Find out here!

GOLD TECHNICAL ANALYSISGold prices inching toward resistance at 1267.81, the 50% Fibonacci retracement. Breaking this barrier on a daily closing basis opens the door for a test of the 1274.56-75.24 area (November 30 close, 61.8% level). Alternatively, a move back below the 38.2% Fib at 1260.38 exposes the 23.6% retracement at 1251.18 anew.

Gold Prices May Ignore Vote Passing US Tax Cut Plan

Chart created using TradingView

CRUDE OIL TECHNICAL ANALYSISCrude oil prices continue to oscillate within a would-be Triangle chart pattern, a setup arguing for upside continuation in this case. A daily close above the Triangle top (58.32) exposes the 23.6% Fibonacci expansion at 59.83. Alternatively, a move below its bottom (56.37) sees the next downside barrier at 55.04, the 23.6% Fib retracement.

Gold Prices May Ignore Vote Passing US Tax Cut Plan

Chart created using TradingView

--- Written by Ilya Spivak, Currency Strategist for DailyFX.com

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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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