Gold Rises on Doubts Over Tax Overhaul, Saudi Shake-up -- Update
By Ira Iosebashvili
Gold prices were on track for their highest close in more than two weeks Wednesday, as investors grew more skeptical that the White House will be able to push through its tax overhaul in coming months.
Gold for December delivery was recently up 0.7% at $1,285.30 a troy ounce on the Comex division of the New York Mercantile Exchange, on track for its highest close since Oct. 19.
Disagreements over key pieces of the GOP's proposed tax overhaul could force Republicans to make changes and slow down plans to pass it by year's end. Some analysts believe the reforms could boost the economy and push the Federal Reserve to raise rates at a faster pace. Expectations of higher rates tend to weigh on gold, which struggles to compete with yield-bearing investments when rates rise.
A political shake-up in Saudi Arabia and an attempted missile strike on the country by a group that Saudi officials believe is backed by Iran have sparked demand for the safe-haven metal, analysts said.
"This is a time to hold insurance," said Peter Hug, global trading director at Kitco Metals, in a note to clients.
In base metals, copper for December delivery rose 0.3% to $3.0995 a pound.
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