Gold is down within the well defined range, weighed by intraday dollar gains and firm stocks. The low end of the range at 1260.10 is protected by an intervening tier of support at 1263.00.
Risk appetite remains elevated as tax reform makes its way through the process. Additionally, it looks like Congress is going to kick the can yet again on funding for the government and the debt ceiling, averting a partial government shutdown at the end of the week. “There’s not going to be a government shutdown,” said Senate Majority Leader Mitch McConnell.
There still some political wrangling to be done, both on the funding measure and on the tax bill, and there’s not a heck of a lot of time. However, markets seem optimistic that both are going to get done.
The U.S. trade deficit widened to -$48.7 bln in October, outside expectations of -$46.6 bln. What’s interesting is that the deficit is nearly as wide as it’s been in 5-years, despite the fact that the dollar has been under pressure for most of the year.
While the greenback was on the rise from September through early-November, at the end of October the dollar index was down 7.3% YTD. If President Trump really wants to improve the trade balance, it seems a much weaker dollar is going to be needed.