Fundamental Forecast for Gold: Neutral

Gold prices are down for the second consecutive week with the precious metal off 0.57% to trade at 1280 ahead of the New York close on Friday. The losses come amid continued strength in broader risk assets with all three major U.S. Indices probing fresh record highs this week.

Heading into next week markets will be highly reactive to headline risk from the ongoing debate on the tax reform bill. Tax reform could ultimately weigh on gold prices IF the move stokes inflation closer towards the Fed’s 2% target and forces the central bank to hikes rates at a faster pace next year. That said, the degree to which this would impact the larger outlook for bullion prices may be limited.

U.S. Non-Farm Payrolls are on tap next Friday and consensus estimate are calling for the addition of 200K jobs for the month of November with unemployment widely expected to hold steady at 4.1%. Keep a close eye on the average hourly earnings as concerns over subdued wage growth may keep the central bank on hold in the first half of 2018, especially amid the upcoming rotation within the FOMC. For gold, the technical outlook heading into the December open allows for some further losses before risking major damage to the broader uptrend in bullion prices.