Investing.com – Gold prices turned higher on Wednesday, as concerns over a potential U.S. tax overhaul weighed on the dollar, while geopolitical tensions with North Korea and in the Middle East prompted investors to flock to safer assets.
Comex gold futures were up 0.26% at $1,279.06 a troy ounce by 04:05 a.m. ET (08:05 GMT).
The greenback was hit by reports that a key corporate tax cut currently under discussion in U.S. tax reforms plans could be delayed for one year.
The Washington Post reported on Tuesday that Senate Republican leaders are thinking of postponing the implementation of the major corporate tax cut to comply with Senate rules.
The U.S. dollar had been supported in recent session by hopes the U.S. administration’s tax cuts could boost the economy.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was steady at 94.74.
Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency.
Meanwhile, investors remained cautious after, in an address to the South Korean parliament on Wednesday, U.S. President Donald Trump addressed tensions with North Korea, saying that it “has interpreted America’s past restraint as weakness.”
“This would be a fatal miscalculation. This is a very different administration than the United States has had in the past,” he added.
Trump arrived in South Korea on Tuesday after meeting with Japan Prime Minister Shinzo Abe over the weekend.
Safe-haven demand also strengthened after Saudi Arabia over the weekend launched an anti-corruption purge among the highest levels of the establishment. In a separate event, the Saudi Kingdom accused Iran of being responsible for a ballistic missile attack carried out in Yemen, adding to local geopolitical tensions.
In addition, Lebanese Prime Minister Saad Hariri surprised markets on Saturday by announcing his resignation, citing assassination threats and blaming Iran for interference in Lebanon.
Elsewhere on the Comex, silver futures gained 0.60% to $17.04 a troy ounce.