Gold prices edged higher on Monday, as the U.S. dollar pulled back despite mounting hopes that a major U.S. tax reform can be passed before the end of the year.
Comex gold futures were up $2.10 or about 0.16% at $1,259.70 a troy ounce by 03:00 a.m. ET (07:00 GMT), just off Friday’s one-and-a-half week high of $1,264.50 hit.
The greenback was initially lifted after Republicans on Friday put the finishing touches on a sweeping tax overhaul bill.
They are confident Congress will now pass the tax bill this week, with a Senate vote planned as early as Tuesday.
The precious metal had strengthened last week after the Fed raised interest rates by 0.25 basis points to 1.50% but did not change its projections for 2018.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.15% at 93.32.
Gold is sensitive to moves in both U.S. rates and the dollar. A stroner dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, silver futures added 0.32% to $16.12 a troy ounce.
