· Gold prices edged lower on Monday, pressured by firmer equities and a buoyant dollar after a bill to overhaul the tax system in the United States moved a step closer to ratification.
Spot gold was down about 0.1 percent at $1,254.40 an ounce at 0346 GMT.
U.S. gold futures were little changed at $1,257.70 an ounce.
· The dollar held modest gains on Monday, having received a lift after top U.S. Republicans said they expected Congress to pass a tax code overhaul this week. A Senate vote could come as early as Tuesday and President Donald Trump aims to sign the bill before the week is out.
· “I think we have the last bearish news, which is the tax reform, and that is negative for gold so we expect gold to stay pretty depressed,” said Richard Xu, a fund manager at China’s biggest gold exchange-traded fund, HuaAn Gold.
The U.S. tax bill, which would cut taxes for businesses and the rich while offering everyday Americans a mixed bag of changes, has helped drive the surge in equity markets this year.
· Asian shares gained on Monday, pulled higher by Wall Street, which hit record highs on expectations U.S. lawmakers will pass the long-awaited bill.
Expectations that tax cuts would spur economic growth and prompt faster interest rate rises in the United States have boosted the dollar and weighed on gold.
· Spot gold faces a resistance at $1,262 per ounce and may hover below this level or retrace to a support at $1,239, Reuters technicals analyst Wang Tao said.
· Hedge funds and money managers cut their net long positions in COMEX gold contracts in the week to Dec. 12, while they switched to a net short stance in silver for the first time in five months, U.S. Commodity Futures Trading Commission (CFTC) data showed on Friday.
· In other precious metals, silver and palladium were nearly unchanged at $16.04 per ounce and $1,022.95 per ounce, respectively.
Platinum was 0.3 percent lower at $890.50 an ounce, after earlier touching its best since Dec. 8 at $896.80.
Reference: Reuters
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