Gold prices rose to a three-and-a-half month high amid concerns over Trump's proposed tax plan and the U.S. economic policy under the new Trump administration. In addition, investors were affected by the statements of the U.S. Treasury Secretary, Steven Mnuchin on Trump's proposed tax plan and the investment in infrastructure.
Gold prices hit $1,260, before paring its gains at the end of last week to settle at $1,256, boosted by a weak dollar. Gold prices are expected to re-test its 200-day average of $1,262; however, it is unlikely to trade above such levels in anticipation of Trump’s speech.
Markets are awaiting Trump’s speech before the Congress on Tuesday, as he could touch upon plans for overhauling the tax code. The U.S. dollar index rose slightly and settled at 111.17 pips at the end of last week.
USD pared its losses vs. JPY and settled at ¥112, the lowest level in two weeks. The Greenback could trade higher during the day, in anticipation of U.S. durable goods orders.
Euro settled at $1.0560 vs. USD at the end of last week. The common currency is trading under pressure due to uncertainty over the EU’s political outlook as far right French presidential candidate Marine Le Pen has again surged in the polls. In addition, it was affected by the Greek government-debt crisis.
Oil prices fell as much as 1% and settled at $54, at last week trading session on expectations of another surge in U.S. inventories as the number of rigs drilling has increased for six-weeks in a row.
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The prices and news mentioned in this outlook are absolutely no guarantee of future market performance and do not represent the view of ICM Capital Limited. Financial markets can move in either direction causing profits to be made or complete losses to be incurred by the trader. Each trader must decide for themselves what their risk appetite is and ensure that correct risk management procedures are in place before placing any trades.