Gold at two-month low as dollar bounces on U.S. tax plan support
Gold dropped 1 percent to a two-month low on Tuesday as the dollar rose against a basket of currencies and U.S. stocks rebounded as investors assessed details of the U.S. tax overhaul legislation.
The U.S. dollar gained for a second consecutive session and U.S. technology stocks bounced, both benefiting from optimism surrounding the U.S. tax plan. The House of Representatives on Monday voted to go to conference with the Senate on their differing versions of the tax legislation, setting up formal negotiations on the bill.
Spot gold was down 1 percent at $1,263.02 an ounce by 1:49 p.m. EST (1849 GMT), after dropping to a two-month low of $1,260.71.
U.S. gold futures for February delivery settled down $12.80, or 1 percent, at $1,264.90 per ounce.
"With this move today, that opens the door to more liquidation until you get more geopolitical risk and uncertainty in the world," said Josh Graves, senior commodities strategist at RJO Futures in Chicago.
Psychological support could come in at around $1,250 an ounce, Graves added.