Investing.com - Gold prices edged lower during European morning hours on Thursday, pulling back from the prior session's three-week high as markets looked ahead to a key health care vote in Congress later in the day.
Comex gold futures dipped $2.65, or around 0.2%, to $1,247.05 a troy ounce by 4:10AM ET (08:10GMT). Meanwhile, spot gold was down $2.15 at $1,246.80.
Gold settled higher for the fifth session in a row on Wednesday after touching its strongest level since February 28 at $1,251.50 as growing doubts about U.S. President Donald Trump's pro-growth economic agenda prompted investors to dump risky assets and rush to safe havens.
Headlines from Washington will continue to be in focus, as the U.S. House of Representatives is scheduled to vote on repealing and replacing the Affordable Care Act on Thursday, with the votes needed for passage in doubt.
Trump was to meet at the White House with members of the Freedom Caucus on Thursday at 11:30AM ET, the White House said.
The Freedom Caucus, a key group of House Republicans, has threatened to vote against the Obamacare replacement bill, unless the language in the bill changes dramatically.
Investors see the Trump administration's struggles to push through the healthcare overhaul as a sign he may also face setbacks delivering on the promises for tax cuts, regulatory reform and infrastructure spending.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, recovered slightly to 99.57 in London morning trade, after falling to a seven-week low of 99.44 overnight.
Meanwhile, U.S. Treasury yields edged higher, with the benchmark 10-year note yield rising to 2.412%. Yields fell to a three-week low of 2.375% on Wednesday.
The greenback, along with Treasury yields, have been on the retreat since the Federal Reserve raised interest rates on Wednesday last week, but stuck to its outlook for two more hikes this year, instead of three expected by the market.
Fed Chair Janet Yellen is due to deliver opening remarks at the Fed's System Community Development Research Conference, in Washington DC at 8:45AM ET (12:45GMT).
Traders are hoping she will offer insight into the likelihood of higher interest rates in the months ahead.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.