PRECIOUS-Gold edges higher as dollar wilts ahead of U.S. tax vote

Global Stock Markets

Gold rose on Tuesday as caution ahead of the passage of sweeping new tax legislation in the United States weighed on the dollar, with traders uncertain of its actual impact on economic growth. 

Moves in the metal were muted, however, with traders wary of taking new positions ahead of the holiday season. 

Gold is on track to post its narrowest trading range of any quarter in a decade in the last three months of the year. Spot gold was up 0.2 percent at $1,263.62 an ounce at 1030 GMT, while U.S. gold futures for February delivery were up 90 cents an ounce at $1,266.40. 

Last week the metal fell to a five-month low of $1,235.92 as the dollar hit its highest in a month ahead of a widely anticipated U.S interest rate hike from the Federal Reserve. 

With the Republicans' self-imposed Friday voting deadline looming, the U.S. Congress appeared all but certain to pass sweeping tax legislation after two Senate Republican holdouts agreed on Monday to support the tax overhaul backed by President Donald Trump. 

World stocks steadied after their biggest jump in almost six months, fuelled by U.S. tax cut hopes.

That rally fed into what was already one of the strongest and longest global bull runs on record. 

The dollar eased against the euro, however, as investors took a cautious view over how much tax reforms, if passed, would boost the U.S. economy. 

Even as the Congress moved closer to the tax reform, outgoing Federal Reserve Chair Janet Yellen last week gave a more sobering assessment of its impact, saying a short-term bump was likely, but a longer-term boost was not. 

Holdings of the world's largest gold-backed exchange-traded fund, New York-based SPDR Gold Shares , fell 7.1 tonnes on Monday, their largest one-day outflow since late July. That has cut its inflow for the year to just 15 tonnes. 

Among other precious metals, silver was down 0.2 percent at $16.10 an ounce. 

Platinum was up 0.3 percent at $909.50 an ounce, having climbed back above $900 for the first time in nearly two weeks on Monday. The metal has rallied nearly $30 an ounce in the last two trading sessions. Palladium was little changed at $1,017.40 an ounce.