December 4, 2017 / 4:31 AM / 10 months ago

PRECIOUS-Gold eases as dollar gains after U.S. Senate clears tax bill

    * Spot gold may break support at $1,272/oz - Technicals
    * Dollar climbs to 2-1/2-week high vs yen
    * Specs raise net longs in gold in week to Nov. 28

 (Adds MKS trader quote, details, and updates prices)
    By Apeksha Nair
    Dec 4 (Reuters) - Gold prices fell in Asian trade on Monday,
as the dollar gained on expectations that the United States'
economy will expand further after the Senate passed a bill to
overhaul the country's tax system.
    The Senate narrowly approved the overhaul on Saturday,
moving the Republican Party and U.S. President Donald Trump a
big step closer to their goal of slashing taxes for businesses
and the rich while offering everyday Americans a mixed bag of
    The dollar rebounded to a two-week high on Monday after
taking a brief hit on Friday on news that Michael Flynn, former
national security adviser to Trump, pleaded guilty to lying to
the U.S. Federal Bureau of Investigation about his contacts with
    "Bullion is likely to be sensitive to dollar flows, tracking
headlines generated by the FBI probe and any further tax reform
related news as we head toward U.S. Nonfarm Payrolls at the end
of the week," MKS PAMP trader Sam Laughlin said in a note. 
    Spot gold        was down 0.6 percent at $1,272.91 an ounce,
as of 0735 GMT, after touching a high of $1289.50 on Friday. 
    U.S. gold futures         were down 0.5 percent at $1,275.80
an ounce.
    "I think people will be disappointed that gold had that race
up to $1290 area on Friday and we're sitting at $1275...any kind
of rally gold has just seems to be unsustainable for the
short-term" said a Hong Kong-based gold trader. 
    "Whatever is happening to the dollar and the yield curve,
you've got to be watching that," the trader said. 
    Two Federal Reserve policymakers urged caution in raising
interest rates on Friday, saying that the flattening of the
yield curve was a signal that the central bank should proceed
    The U.S. central bank is widely expected to raise benchmark
interest rates for the third time this year at its meeting next
week. Higher rates tend to boost the dollar, making the
greenback-denominated gold more expensive for buyers using other
    Meanwhile, investors also kept a keen eye on developments
surrounding North Korea, with South Korea and the U.S. launching
their largest-ever joint aerial drills on Monday, days after the
North tested its most advanced intercontinental ballistic
    Reuters technicals analyst Wang Tao said spot gold may break
a support at $1,272 per ounce and fall more towards the next
support at $1,263.35.             
    Speculators raised their net-long positions in COMEX gold in
the week to Nov. 28, U.S. data showed on Friday.        
    In other precious metals, silver        slipped 0.7 percent
to $16.32 an ounce.
    Platinum        was 0.4 percent lower at $933.50 an ounce,
while palladium        was little changed at $1,019.40.

 (Reporting by Apeksha Nair in Bengaluru; Editing by Christian
Schmollinger and Sherry Jacob-Phillips)
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