Gold prices dipped on Monday, December 4, towards the four-week lows hit last week as the dollar rose after U.S.politicians approved a major tax overhaul and the market looked ahead to a meeting of the Federal Reserve later this month.
Spot gold was down 0.6 percent at $1,273.04 an ounce, at 1237 GMT compared with last Thursday’s $1,270.11, its lowest level since Nov. 6. U.S. gold futures fell 0.5 percent to $1,275.80 an ounce.
The U.S. Senate narrowly approved a tax reform bill on Saturday, moving U.S. President Donald Trump a big step closer to his goal of slashing taxes for businesses and the rich while offering everyday Americans a mixed bag of changes.
“Prospects for large U.S. tax cuts are a negative for gold. What the Fed does will be very important,” said Quantitative Commodity Research consultant Peter Fertig.
“There is a negative influence coming from other commodities like oil, the dollar is stronger and risky assets are up.”
Lower oil prices could mean subdued price pressures which is a negative for gold, often used as a hedge against inflation.
The dollar was boosted by expectations that tax cuts would boost growth, which could fuel inflation and reinforce the case for higher U.S. interest rates when the U.S. central bank meets on Dec. 12 and Dec. 13.
On the technical front, strong support for gold is around $1,266 at the 200-day moving average, while resistance kicks in around $1,283 near the 21- and 55-day moving averages.
Meanwhile silver slipped 0.8 percent to $16.30 an ounce, platinum was 0.8 percent lower at $930.3 an ounce and palladium lost 0.3 percent to $1,017.25.