December 4, 2017 / 11:08 AM / a year ago

PRECIOUS-Gold price slides towards four-week lows, at risk from higher dollar

    * Market looking ahead to Fed meeting
    * Gold support at 1,266 where 200-day moving average sits

 (Updates prices)
    By Pratima Desai
    LONDON, Dec 4 (Reuters) - Gold prices fell on Monday towards
the four-week lows hit last week as the dollar rose after U.S.
politicians approved a major tax overhaul and the market looked
ahead to a meeting of the Federal Reserve later this month.
    Spot gold        was down 0.6 percent at $1,273.04 an ounce,
at 1237 GMT compared with last Thursday's $1,270.11, its lowest
level since Nov. 6. U.S. gold futures         fell 0.5 percent
to $1,275.80 an ounce.
    The U.S. Senate narrowly approved a tax reform bill on
Saturday, moving U.S. President Donald Trump a big step closer
to his goal of slashing taxes for businesses and the rich while
offering everyday Americans a mixed bag of changes.             
    "Prospects for large U.S. tax cuts are a negative for gold
... What the Fed does will be very important," said Quantitative
Commodity Research consultant Peter Fertig.
    "There is a negative influence coming from other commodities
like oil, the dollar is stronger and risky assets are up."
    Lower oil prices could mean subdued price pressures which is
a negative for gold, often used as a hedge against inflation.
    The dollar was boosted by expectations that tax cuts would
boost growth, which could fuel inflation and reinforce the case
for higher U.S. interest rates when the U.S. central bank meets
on Dec. 12 and Dec. 13.      
    However, on Friday two Federal Reserve policymakers urged
caution in raising interest rates.            
    "The tax bill should be somewhat bearish for gold as it
could place the Fed in a more aggressive rate posture given that
it could contribute to a widening deficit and potentially raise
inflation," INTL FCStone analyst Edward Meir said in a note.
    But he said tax bill was not expected to have much impact on
gold in the short term.
    On the technical front, strong support for gold is around
$1,266 at the 200-day moving average, while resistance kicks in
around $1,283 near the 21- and 55-day moving averages.
    Meanwhile silver        slipped 0.8 percent to $16.30 an
ounce, platinum        was 0.8 percent lower at $930.3 an ounce
and palladium        lost 0.3 percent to $1,017.25.

 (Additional reporting by Apeksha Nair in Bengaluru; Editing by
Greg Mahlich and Edmund Blair)
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