Gold prices drifted lower at the start of a holiday-shortened week on Monday, as investors kept an eye on U.S. tax reform developments.

Comex gold futures shed $5.00, or about 0.4%, to $1,291.51 a troy ounce by 2:50AM ET (0750GMT). It jumped 1.4% to reach its best level since Oct. 16 at $1,297.50 in the last session.

The yellow metal booked a weekly gain of about 1.8% last week, marking its second-straight weekly rise, as investors remained skeptical over whether Republicans can pass a historic tax overhaul.

The House of Representatives passed a bill last Thursday that would lower corporate taxes and cut individual taxes for most households in 2018, in a step towards the biggest U.S. tax code overhaul since the 1980s.

But the legislation may face a tougher fight in the Senate amid resistance within Republican ranks. Senate lawmakers are expected to vote on their version of the bill after this week’s Thanksgiving holiday.

Besides U.S. tax reform developments, global financial markets will focus on minutes of the Federal Reserve’s latest policy meeting in the week ahead, as they look for fresh clues on the likely trajectory of monetary policy.

In addition to the minutes, markets will also be watching Fed Chair Janet Yellen, when she speaks in New York on Tuesday evening.

Staying in the U.S., a report on durable goods orders will be the highlight of the holiday-shortened week. Markets stateside will remain closed on Thursday for the Thanksgiving holiday.

Few expect this week's data to halt the third Fed rate hike of the year next month. The U.S. central bank is scheduled to hold its final policy meeting of the year on Dec. 12-13, with interest rate futures pricing in a 100% chance of a rate hike at that meeting, according to Investing.com's Fed Rate Monitor Tool. For 2018, the Fed is currently forecasting three interest rate hikes, but the markets expect two at most.

Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar, in which it is priced.