What are the political issues to drive Gold this week?
NEW YORK (Scrap Register): Brown Brothers Harriman said that there are three political issues may end up shaping the gold and other commodities investment climate this week.
The most important is United States tax reform. Optimists still think a vote by both houses can be held by the middle of next month, ahead of the winter recess.
“We are skeptical, and the point we have made that is worth repeating is that, like health-care reform, the key debate is not between the two main parties, but within the Republican Party. Despite months of leaders of both houses working with the Trump administration, the bills are dramatically different on several key issues,” BBH added.
Meanwhile, in Europe, negotiations over the United Kingdom's exit from the European Union remains in the forefront. To complicate matters, media reports say a significant number of Tory members of Parliament are willing to sign a letter of no confidence against U.K. Prime Minister Theresa May.
BBH also points to apparent progress in formation of the next German government, with reports that Prime Minister Angela Merkel may soon concede the coveted finance ministry portfolio to a new coalition partner.
However, Merkel may strip the international (e.g., Europe) responsibilities from it and transfer them to the economic ministry. The finance minister's remit would cover the domestic economy.
The economic minister would attend the Eurogroup and G7 meetings, for example. Such considerations may be important as investors attempt to assess the policy implications of the new coalition government, BBH noted.