Investing.com – Gold prices came under pressure on Monday amid a stronger dollar after the U.S. Senate approved a tax bill aimed at overhauling the U.S. tax system and boosting economic growth.
Gold futures for February delivery on the Comex division of the New York Mercantile Exchange fell by $5.20, or 0.41%, to $1277.10 a troy ounce.
US senators passed a tax by narrow by a 51-49 vote, stoking investor hopes of a fiscal boost to the U.S. economy, spurring a rally in the dollar, which pressured demand for gold. The Senate and the House of Representatives is expected to get talks underway this week to reconcile their respective bills.
Rising investor hopes on tax reform comes as the Federal Reserve entered its blackout period ahead of the Dec. 12-13 meeting amid expectations that the central bank will raise rates for the third time this year.
According to investing.com’s fed rate monitor tool 100% of traders expect the Federal Reserve to raise rates in December.
Gold is sensitive to moves higher in both bond yields and the U.S. dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
In other precious metal trade, silver futures fell 0.17% to $16.36 a troy ounce, while platinum futures lost 1.31% to $928.25.
Copper traded at $3.091, down 0.05%, while natural gas fell by 2.97% to $2.97. The slump in natural gas comes as data showed hedge funds raised their bearish bets on natural gas despite reports of a large storm expected to impact the central, Midwestern and eastern U.S. this week.
Money managers boosted bearish U.S. natural gas wagers by 23% in the week ended Nov. 28, the biggest jump since early June, according to CFTC data.