UPDATE: Gold edges down to a 6-week low
By Myra P. Saefong and Sara Sjolin, MarketWatch
Trump tax plans add extra pressure on gold
Gold fell slightly, notching a six-week low on Thursday, squeezed by overall strength in the dollar on the back of growing expectations that the Federal Reserve will raise interest rates again this year and following the release of U.S. President Donald Trump's plan for significant tax cuts.
Gold for December delivery gave up $1.20, or 0.1%, to $1,286.60 an ounce, setting it on track for its lowest settlement price since Aug. 16, and a third straight day of losses, according to FactSet data.
The recent selloff comes as the dollar rallied on rising expectations the Fed will raise interest rates in December. Fed Chairwoman Janet Yellen earlier this week reaffirmed that December is still in play, saying it would be "imprudent" to leave monetary policy on hold until inflation hits the central bank's target. Late Wednesday, Boston Fed President Eric Rosengren said he backs 'regular and gradual' interest-rate rises (http://www.marketwatch.com/story/feds-rosengren-backs-regular-and-gradual-interest-rate-hikes-2017-09-27).
Additionally, the Republicans' plans to lower the corporate tax rate from 35% to 20% was boosting the greenback on the prospect that--if approved--the tax cuts could boost the economy and provide the backbone for further tightening.
The ICE Dollar Index , which measures the buck against a basket of six rival currencies, was down 0.3%, but that's after touching its highest levels since late August. A stronger dollar makes it more expensive for holders of other currencies to buy dollar-denominated commodities, such as gold.
"We suspect that gold will likely remain on the defensive for a little while longer, as the market currently is in the throes of a higher dollar/higher rates backdrop," said Edward Meir, independent commodity consultant at INTL FCStone. "Barring a major geopolitical shock, it sees the path of least resistance is lower still."