ALSO READGold gains as dollar dips on uncertainty over Trump tax bill Gold firms as U.S. tax reform uncertainty stokes risk aversion Gold gains on possible delays in U.S. tax cut plan Gold comes off highs after U.S. House Republicans propose tax cuts Gold falls as hopes of U.S. tax reform boost riskier assets
By Pratima Desai
LONDON (Reuters) - The price of gold fell on Monday towards the four-week lows hit last week as the dollar rose after U.S. politicians over the weekend 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 $1,273.00 an ounce, at 0735 GMT compared with last Thursday's $1,270.11, its lowest level since Nov. 6. U.S. gold futures fell 0.5 percent to $1,275.90 an ounce.
The U.S. Senate narrowly approved a tax reforms 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 13.
However, on Friday two Federal Reserve policymakers urged caution in raising interest rates.
"The tax bill should be somewhat bearish for gold as it could place the Fed in a more aggressive rate posture given that it could contribute to a widening deficit and potentially raise inflation," INTL FCStone analyst Edward Meir said in a note.
"However ... we do not know whether the measure will have the intended consequences that its proponents claim. As a result, we do not see the measure ... having much impact on the precious metal, at least over the short-term."
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 0.9 percent to $16.29 an ounce, platinum was 0.7 percent lower at $930.5 an ounce and palladium lost 0.6 percent to $1,014.4.
(Additional reporting by Apeksha Nair in Bengaluru; Editing by Greg Mahlich)
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)