Investing.com - Gold prices slipped lower on Friday, as traders locked in profits from the precious metal's rally to three-week highs in the previous session, boosted by U.S. political concerns and thus a softer dollar.
Comex gold futures were down $2.48 or about 0.19% at $1,284.92 a troy ounce by 05:00 a.m. ET (09:00 GMT), just off the previous session's three-week highs of $1,288.77.
U.S. Senate Republicans unveiled a plan on Thursday which would reduce the corporate tax rate to 20% from 35% and make other significant changes to the individual tax system.
However, sentiment on the greenback remained fragile as Senate Republican leaders said they were considering postponing the implementation of the major corporate tax cut until 2019.
Meanwhile, a House tax reform bill, which differs from the Senate version, would be expected to take effect next year.
If the Senate and House pass separate tax bills, lawmakers will have to reconcile them.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down at 94.33, its lowest since November 3.
Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency.
Meanwhile, investors also continued to monitor developments in the Middle East after Saudi Arabia on Thursday ordered its citizens to leave Lebanon immediately amid mounting tensions with Iran, which it claims is running the Lebanese government through its proxy Hezbollah.
Lebanese Prime Minister Saad Hariri surprised markets last Saturday by announcing his resignation, citing assassination threats and blaming Iran for interference in Lebanon.
Saudi Arabia has also been conducting an anti-corruption purge among the highest levels of the establishment. After a first crackdown over the weekend, local authorities said on Wednesday that they had made additional arrests and frozen more bank accounts among the kingdom's political and business elite.
Elsewhere on the Comex, silver futures rose 0.28% to $17.02 a troy ounce.
Palladium futures remained suppported at $1,004.65. The metal rallied to a 16-year high of $1,023.17 on Thursday, boosted by growing interest in lithium-ion batteries used in electric cars.
Palladium is used in catalytic convertors that convert harmful gases in car exhaust into less toxic substances. Demand for the metal is growing dramatically as car manufacturers look for other ways to cut emissions.