Gold declined on Monday, its haven status overshadowed as U.S. equities climbed and the dollar firmed after weekend passage in the Senate of what’s seen as business-friendly tax changes. Gold for February delivery settled down $4.60, or 0.4 percent, at $1,277.70 per ounce. The dollar was lifted by expectations that U.S. tax cuts would boost economic growth, which could fuel inflation and reinforce the case for higher U.S. interest rates when the U.S. central bank meets on Dec. 12-13. The U.S. Senate approved a tax reform bill on Saturday, moving President Donald Trump a big step closer to his goal of cutting taxes for businesses. Going forward there are still some uncertainties that still are providing support for gold. The U.S. Senate’s and House of Representatives’ separate forms of the tax bill still must be reconciled. Uncertainty over whether this can be done in a timely manner and tensions over North Korean missile tests continue to give gold underlying support in my view. Also continuing concerns over an investigation into former U.S. national security adviser Michael Flynn’s contact with Russia’s U.S. ambassador during Trump’s election campaign have been a bullish under current in the market. Gold has been stuck in a $1,270-$1,300 range the last few months. Strong technical support for gold is around $1,268 at the 200-day moving average, while resistance kicks in at about $1,287 which is the 100 day moving average.
My weekly technical swing numbers for both February gold and March silver comes in as follows. For February gold, support is down at 1269.0. A close under and 1255.9 is next. Resistance is at the weekly pivot and 100 day moving average at the 1286-87 area. A close above and 1299.3 is next. For March silver, support is down at 15.99. A close below and 15.62 is next. Resistance is up at 1663 and above there at 17.00.
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