Investing.com - Gold edged up in Asia on Monday as US tax cuts look set for passage this week and likely affecting rate hike views by the market and the Fed going forward.
Gold futures for February delivery dipped 0.02% to $1,257.20 a troy ounce on the Comex division of the New York Mercantile Exchange.
Japan reported its trade balance for November came in at a surplus of ¥113 billion, compared with a ¥55 billion deficit expected. China said house prices gained 5.1% in November, compared with a 5.4% gain the previous month.
This week, the final reading of third-quarter U.S. growth will be the main focus for global financial markets, as investors begin to wind down trading activity before the Christmas and New Year holidays.
In the U.K., market players will be looking ahead to a final reading on British growth data for further indications on the continued effect that the Brexit decision is having on the economy.
Investors will also keep an eye out on survey data on German business confidence to gauge sentiment in the euro zone's largest economy.
Elsewhere, traders will pay close attention to a monetary policy decision due in Japan amid speculation the Bank of Japan will lag well behind major global central banks in dialing back its massive stimulus program.
Last week, gold inched higher on Friday, with prices tallying their first weekly gain in a month amid expectations the Federal Reserve will maintain a slower pace of interest rate hikes next year.
The Fed raised interest rates for a third time this year on Wednesday, as widely expected, and indicated that it would stay on a similar path next year, disappointing some who had speculated the U.S. central bank could raise its interest rate projection for next year to four rate hikes.
The central bank also said it expected inflation to remain below its target for another year, tempering expectations for an accelerated pace of rate hikes.
Gold is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.
Meanwhile, growing investor optimism surrounding U.S. tax reform limited gains, following reports that Republicans secured enough votes for the bill passage. The House was expected to vote on the bill on Tuesday.
Some investors expect that the tax overhaul may boost U.S. growth, leading to more interest rate hikes and a higher dollar.