COMEX gold trades in a narrow range near $1270/oz holding on to recent gains. Gold has benefitted from choppiness in equity market and US dollar.
The US dollar index weakened on narrowing yield gap between US and European bond and uncertainty about Fed's monetary policy. German bond yields led a sharp rise in global bond yields this week however US bond yields lagged and this has put pressure on US dollar.
Sell-off in bond markets also affected equity market. Market players are also trying to assess impact of US tax reforms. US tax reforms have been approved by both the US Senate and US House of Representatives and will now go to US President for final assent.
The tax reforms are expected to boost growth however market players are concerned that the impact may be short-lived. It will also add to debt over coming years.
However, weighing on gold price is upbeat US economic data and surge in yields. US existing home sales data released yesterday was better than expectations. Existing home sales rose 5.6% to 5.814 million units in November.