Despite some local USD demand, the currency will hardly be able to gain any follow-through traction, at least in the short-term, as the US tax overhaul approval failed to impress the dollar bulls. Moreover, there is much skepticism over the tax reform efficiency for the economy and concerns about this plan which would add more than $1 trillion to the federal budget deficit over the next decade.
On the back subdued USD prospects, the precious metal may preserve recent gains and attract buyers again, especially if safe-haven demand which revived a bit today, remains intact. In this respect the results of Catalonia election. If the pro-independent parties do better in the vote, risk aversion may increase and support gold demand. In this case the first target is at $1,264.66.