Gold dips on firmer dollar but stays close to 1-month peak

Gold eased on Monday due to a stronger US dollar, but remained near a one-month high hit in the previous session on uncertainty over progress on a potential overhaul of the US tax code.

Spot gold was down 0.2 percent at $1,291.44 per ounce by 0757 GMT, but not far off Friday's peak of $1,297, its strongest level since Oct. 16.

US gold futures for December delivery dropped 0.4 percent to $1,291.20.

“Friday's move higher has definitely improved gold's chart patterns, but it remains to be seen if this will be enough to attract fresh fund buying,” INTL FCStone analyst Edward Meir said in a note.

“Much of this will depend on the progress (or lack thereof) that the US tax bill makes in the Senate. If efforts to pass it flounder, we could see a much sharper correction set in over US equities, prompting another leg higher in gold.”

US President Donald Trump would not insist on including repeal of an Obama-era health insurance mandate in a bill intended to enact the biggest overhaul of the tax code since the 1980s, a senior White House aide said on Sunday.

“The apparent difficulty in getting tax cuts approved in the US Senate has seen investors return to safe-haven assets,” ANZ analysts said in a note.