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· Gold prices slipped to a near one-week low on Tuesday as the dollar strengthened following a deal on extending debt limit in the United States.

· President Donald Trump and U.S. congressional leaders agreed on Monday on a two-year extension of the debt limit and federal spending caps to avert a government default this year but adding to budget deficits in the world’s largest economy.

· Spot gold fell 0.4% to $1,418.39 per ounce as of 1013 GMT. Prices had dropped to $1,413.80 earlier in the session, last touched on July 17.

U.S. gold futures dropped 0.6% to $1,421.7

· “We’re seeing a slightly stronger dollar and also news on the political front in the U.S. ... created a bit of an opportunity for profit taking,” said Capital Economics analyst Ross Strachan, adding prices could soften in the near term.

“You’ve seen a sharp upward move over the past weeks in gold. The momentum seems to have been lost and some short-term investors have looked to take those healthy profits ahead of the U.S. Federal Reserve decision next week,” Strachan said.

· The greenback rose 0.3% versus a basket of its rivals to 97.56, its highest level since July 9.

· The Fed is seen as certain to cut its benchmark rate at its July 30-31 meeting. The European Central Bank (ECB) is also expected to signal easier monetary policy when it meets on Thursday.

· In Britain, some investors worry Boris Johnson, expected to be the next prime minister, could pull Britain out of the European Union on Oct. 31 without a trade deal, in a bid to appease anti-EU members of his Conservative Party.

· Despite underlying support, analysts say gold could post losses in the coming days. Gold may fall into a range of $1,401-$1,409 per ounce as it has broken a support at $1,422, said Reuters technical analyst Wang Tao.

· Meanwhile, silver stood out from its peers, rising 0.5% to $16.42 an ounce.

· “You’ve seen a rapid increase in silver Exchange Traded Fund (ETF) holdings. I think it’s very much a function of how low the price was and that it’s getting picked up on positive investor sentiment for safe havens such as gold and silver,” Strachan said.



· Holdings of the largest gold-backed ETF, New York’s SPDR Gold Trust, rose 0.6% on Monday from Friday, while the largest silver-backed ETF, the iShares Silver Trust, rose 2.6% during the same period. Holdings in the silver ETF have risen about 10% so far this month.

· Among other precious metals, palladium dipped 0.7% to 1,518.01 per ounce while platinum fell 0.3% to $841.50.