Investing.com - Gold prices dipped on Monday in Asia as expectations that US tax cuts are closer to passage and as news on the politics surrounding the investigation of Russian meddling in the 2016 election was mulled.
Gold futures for December delivery eased 0.36% to $1,277.10 a troy ounce on the Comex division of the New York Mercantile Exchange.
Senate Republicans narrowly passed a bill to overhaul the U.S. tax system in the wee hours of Saturday. The GOP still needs to overcome significant disagreements for the House and Senate to craft a joint bill in a process called resolution and send it to Trump's desk. Republicans hope to reach a deal by Christmas.
ABC News reported on Friday that Michael Flynn, the former White House national security advisor, would testify that he was directed to make contact with Russians during the presidential campaign in 2016. Flynn pleaded guilty to lying to the FBI about his post-election contacts with Russia's ambassador to the U.S.
The ABC report was later corrected the story to say its source had clarified that Trump gave Flynn the directive "shortly after the election" to discuss strategies for fighting the Islamic State extremist group.
This week, interest rate reviews in Australia and Canada will be closely watched.
Last week, gold prices ended higher and the dollar weaker on Friday after Flynn pleaded to lying to the Federal Bureau of Investigation about his communications with the Russian ambassador to the U.S. in December 2016. He also admitted to speaking with a top member of the Trump transition team regarding his communications with the Russian ambassador.
A weaker dollar typically tends to support gold, which is denominated in the U.S. currency and becomes more affordable to foreign buyers when the dollar declines.
The Trump administration has said its tax cuts will generate growth and spark inflation, which investors expect will prompt a faster pace of monetary tightening by the Federal Reserve.
Expectations for higher interest rates are typically negative for gold as the precious metal struggles to compete with yield-bearing assets like Treasury’s when borrowing costs rise.