Investing.com - Gold prices climbed to the highest level in more than two weeks in European trade on Tuesday, as the dollar dived after the Republican healthcare bill aimed at replacing Obamacare failed to get enough backing to proceed to a debate.
Comex gold futures were at $1,235.83 a troy ounce by 3:15AM ET (0715GMT), up $2.10, or around 0.2%, after touching its highest since July 3 at $1,238.10 earlier.
Prices settled higher for a second-straight session on Monday on bets that lackluster U.S. data will keep the Federal Reserve cautious about the future pace of policy tightening.
Republican Senators Jerry Moran and Mike Lee announced their opposition on Monday to a revised Republican healthcare bill, delivering a serious blow to the legislation.
In response, President Donald Trump said on Twitter Congress should immediately repeal Obamacare and "start from a clean slate" on a new healthcare plan.
Investors were now more doubtful over the future of the Trump administration's planned tax reforms, given the difficulty the healthcare bill has faced in making progress.
The dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, sank to a 10-month low of 94.50.
Meanwhile, investors continued to temper their expectations for further rate hikes by the Federal Reserve this year amid the subdued inflation outlook.
Futures traders are pricing in less than a 40% chance of a rate hike by the end of the year, according to Investing.com’s Fed Rate Monitor Tool.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Also on the Comex, silver futures dipped 2.0 cents, or roughly 0.1%, to $16.07 a troy ounce.
Among other precious metals, platinum was down 0.5% at $925.05, while palladium was little changed at $866.80 an ounce.