Gold has inched lower in the Tuesday session. In North American trade, the spot price for an ounce of gold is $1260.51, down 0.14% on the day. On the release front, Building Permits and Housing Starts both beat expectations. There was more good news as the US current account deficit in Q3 dropped to $101 billion, easily beating the estimate of $116 billion. This was the lowest monthly deficit since 2014. On Wednesday, the US releases Existing Home Sales.
Thanks to monumental efforts by Republican lawmakers in recent weeks, the US tax reform bill appears to have enough votes to pass through Congress and become law. The House and Senate reconciled their versions of the tax bill on Friday, and the uniform legislation is expected to be voted on in the House and the Senate later on Tuesday. With Democrats in both branches opposing the bill, the Republicans will need every vote in the Senate, where they have a razor thin 59-41 majority. Several Republican senators who were undecided have said they will vote in favor, so the bill is likely to pass through Congress and will then be signed into law by President Trump. This marks the first major overhaul of the US tax code in 30 years, and would represent a huge victory for Trump, ahead of Congressional elections in 2018.
Despite a persistent lack of inflation, a second rate hike in two months appears likely in January. The US economy has been firing on all cylinders, but analysts remain stumped as to why strong growth and a red-hot labor market have not led to higher inflation. The labor market continues to operate at full capacity and various sectors in the economy are reporting a lack of workers. Still, this has not translated into stronger wage growth, despite predictions from Janet Yellen and other Fed policymakers that a lack of workers is bound to push up wages. The Fed appears ready to continue to jack up rates, despite the lack of inflation. The markets are preparing for another quarter-point increase next month, with the odds of a rate hike standing at 98%, according to the CME Group.
