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Gold prices edged down on Thursday as global risk sentiment ebbed, but scepticism over US President Donald Trump's tax reform plan curbed further losses.
Spot gold was down 0.3 per cent at $1,264.60 per ounce as of 0736 GMT. Bullion prices edged away from a two-week low of 1,259.90 hit on Wednesday.
US gold futures climbed 0.1 per cent to $1,265.90 an ounce.
“Gold is being pulled down by descending global risk sentiment... But the market is still worried about whether (US tax cut) policy would be carried out as the rate cut is too steep...,” a trader with a Shanghai-based bullion bank said.
President Donald Trump had unveiled a one-page plan on Wednesday proposing deep US tax cuts, many for businesses, that would make the federal deficit balloon if enacted, drawing a cautious welcome from fiscal conservatives and financial markets.
“I think they are trying to attract business to the US, which is good for the economy and stock market, and thus a negative impact towards the gold price,” said Spencer Campbell, general manager with Kaloti Precious Metals in Singapore.
“We have to see whether or not he could pass the Bill... sentiment would be driven the other way should he not be able to pass that Bill.”
Gold has struggled to make effective rallies as the previous week's geopolitical tensions fade from traders' minds, said Jeffrey Halley, senior market analyst, OANDA.
“From a technical perspective, gold still appears to be setting itself up for a meaningful correction lower with nearby support at $1,254, the 200-day moving average.”
Spot gold still targets $1,249 per ounce, as it has pierced below a support at $1,265, according to Reuters technical analyst Wang Tao.
The markets are also waiting for the European Central Bank's upcoming monetary policy decision, where it is set to keep its ultra-easy policy stance firmly in place.
Silver slipped 0.1 per cent to $17.45 an ounce after hitting its lowest in over a month in the previous session at $17.28. Platinum gained 0.3 per cent to $944.90 an ounce and palladium dropped 0.1 per cent at $807.20 an ounce.
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