Gold prices rose for a third day on Wednesday as the dollar weakened and U.S. bond yields fell despite solid U.S. economic data that reinforced expectations that the Federal Reserve will press ahead with increases to U.S. interest rates.
The data showed an unexpected rise in U.S. retail sales in October and a pick-up in underlying inflation.
However, the outlook for U.S. tax cuts that could stimulate economic growth was clouded after U.S. Senate Republicans created new political obstacles by linking the repeal of a key component of Obamacare to the tax reform plans.
"The biggest factor right now shoring up gold is the weaker dollar," said Robin Bhar, head of metals research at Societe Generale.
"Also, there's speculation that tax cuts could be a long time coming, meaning the Fed will not have to be as aggressive as it might have been."