Gold prices settled lower on Wednesday after a three-day rally driven by investors short-covering, as a tentative U.S. budget deal supported expectations for an earlier reduction in U.S. monetary stimulus.
The bipartisan budget deal announced in the U.S. Congress on Tuesday is expected to end three years of impasse and fiscal instability in Washington that culminated in October with a partial government shutdown.
“The budget agreement in Congress is removing some of the uncertainty that potentially persuaded the Fed not to taper back in October when they had the chance,” Saxo Bank’s head of commodity strategy Ole Hansen said.
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