After rising sharply yesterday, gold is moving down today. Given the precious metal's sensitivity to real rates, gold prices are benefiting from the Federal Reserve's doubts regarding future inflation. As per the FOMC's minutes, while a December rate hike looks likely, there are doubts about inflation in 2018 and beyond. As the odds of future rate hikes decrease, gold is strengthening thanks to lower real rates. Our view remains that doubts regarding the US Senate tax bill will ultimately lead to some support for gold in the short term.
After its most recent top above $1,300, gold is now above $1,288.