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USAGOLD/Peter Grant/04-26-17
Gold is consolidating at the low end of this week’s range as French election relief and the proposed U.S. corporate tax cut continues to foster a risk-on environment. Geopolitical risks and a weaker dollar are seen as limiting the downside.
Treasury Secretary Mnuchin, speaking in CNBC this morning, confirmed that the Trump administration would seek a 15% corporate tax rate. Mnuchin claimed the plan would be “the biggest tax cut and the largest tax reform in the history of our country.”
Now we just need to see the details, realizing that a tax cut of this magnitude is also going to take a serious bite out of revenue. Each percentage-point cut is said to equate with $120 bln in tax revenue. You start talking about a 20 bps tax cut and you’re talking about real money.
Today’s U.S. economic calendar is quiet with EIA data and 2-year and 5-year Treasury auctions. Tomorrow the ECB will announce policy.
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