Investing.com - Gold prices edged up in Asia as U.S. tax cuts move closer to passage, raising inflation concerns for some investors.
Gold futures for December delivery on the Comex division of the New York Mercantile Exchange rose 0.43% to $1283.66 a troy ounce. Overnight, the U.S. House of Representatives passed its version of the tax cut legislation while a key committee reported its version to the full U.S. Senate.
Overnight, gold prices were roughly unchanged on Thursday as the recent trend of flattening yields faded but downside momentum was capped by dollar weakness on the back of soft economic data.
Ahead of the GOP House vote on tax reform, gold prices traded in a narrow range on Thursday as gains amid a falling dollar were capped by an uptick in treasury yields.
The U.S. Department of Labor reported Thursday that initial jobless claims increased 10,000 a seasonally adjusted 249,000 for the week ended Nov. 11, missing forecasts of a 4,000 decrease.
Philly Fed manufacturing index for November fell to 22.7 in November from 27.9 in October, undershooting economists’ forecasts for a reading of 25.
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.
Traders, however, shifted attention to tax reform as the House is poised to pass a massive overhaul of the U.S. tax code on Thursday as Republicans attempt to push through tax reform before year-end.
Uncertainty over the outcome of tax reform has renewed investor appetite for safe-haven gold, as data showed traders increase their bets on the precious metal last week.
A fire has broken out at the main port used by copper miner Freeport-McMoRan Inc in Papua, Indonesia, on Thursday night, company sources said.