Investing.com - Gold prices held steady near one-and-a-half month lows on Friday, as the hopes for a U.S. tax reform plan and a rate hike before the end of the year continued to support demand for the U.S. dollar.
Comex gold futures were little changed at $1,289.70 a troy ounce by 03:00 a.m. ET (07:00 GMT), very close to the previous session's one-and-a-half month trough of $1,280.40.
The greenback was boosted after U.S. President Donald Trump unveiled a plan on Wednesday calling for lower tax rates for businesses and individuals as part of a comprehensive overhaul of the U.S. tax code.
Gain's were capped however as the proposal still faces an uphill battle in the U.S. Congress, with the Republican Party divided over it and Democrats hostile.
Sentiment on the U.S. dollar also remained supported since Fed Chair Janet Yellen called for gradual rate hikes in a speech on Tuesday.
Market participants were looking ahead to the release of U.S. reports on personal spending and consumer sentiment due later Friday, for further indications on the strength of the economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.14% at 93.08, just off Thursday's one-month peak of 93.50.
Gold is sensitive to moves higher in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
Elsewhere on the Comex, silver futures added 0.14% to $16.87 a troy ounce.