Gold was steady on Friday as the dollar and stocks fell on a delay to U.S. tax reforms but the precious metal was still poised to end the week lower.
"Tax reform would be negative for gold," said Commerzbank analyst Carsten Fritsch, "because this will lead to higher inflation and more Fed rate hikes."
He said the recent weakness in gold could be attributed to an ongoing rally in global equity markets, boosted by "economic optimism and hopes regarding tax reform."
The Republican tax overhaul stalled on a procedural issue, putting off any votes until Friday morning. It was unclear if there would be a decisive vote on the bill on Friday.
"The market's main focus is now whether the tax bill will pass or not," said Yutaka Miura, a senior technical analyst at Mizuho Securities in Tokyo.
U.S. stocks this week hit record highs on bets that U.S. tax reforms would go through but eased following the delay on Thursday.
Lower appetite for assets considered risky such as stocks, boosts the appeal of assets viewed as safer, such as gold.
The dollar index, which gauges the greenback against a basket of six major rivals, was softer at 92.984 as the market waited for the tax reform bill vote.
On Thursday, gold fell 0.7 percent to touch its lowest since Nov. 6 at $1,270.11.
"Gold lost more ground yesterday, unable to withstand the blistering rallies we have been seeing in both U.S. equities and even in bitcoin, which is up a staggering nine-fold so far this year," INTL FCStone analyst Edward Meir said.
A lack of clear drivers has kept gold between $1,265 and $1,300 an ounce throughout November, its narrowest monthly range in 12 years.
Silver slipped 0.9 percent to $16.30 after matching an Oct. 6 low of $16.30 an ounce in the previous session. It was down over 3 percent for the week.