Economic calendar can trigger volatility in gold but trend remains positive
After a sluggish start in the previous week, gold managed to hold on to most of its gains made in the recent day and took advantage of the falling yields and volatile dollar. Spot prices for the metal nearly reached $1,800 an ounce.
The proposed tax laws, which will pay for a forthcoming plan to dramatically expand benefits for the American working class such as child care and paid leave, would concentrate on a sharp rise in tax on capital gains, which would mostly affect those earning more than $1 million a year. A major shift in the way assets are taxed has obvious ramifications for financial markets, and even if the consequences are difficult to parse or forecast in depth, the market's initial response to higher taxes is often a little negative.
Investors are also likely to recognise that the period between the proposal and the eventual portrayal of any tax hike would almost certainly be lengthy but, depending on when it is revealed, it may be a positive factor for safe- haven assets.
The Vaccination drive is going on in full swing. The US recently crossed 200 million doses administered, a revised target from 100 million in the first 100 days of President Joe Biden taking office.