Gold prices rallied Friday to a more than one-month high, tacking on nearly 1.8% for the week, as the latest developments in the investigation into Russia’s interference in the U.S. presidential election knocked the dollar lower. Let us discuss this action in gold prices:

December gold prices GCZ7, +1.27% climbed by $18.30, or 1.4%, to settle at $1,296.50 an ounce. Gold futures, which saw their biggest single-session percentage gain since May, scored an almost 1.8% weekly rise, its second in a row. The exchange-traded SPDR Gold Trust GLD, +1.20%  was up 1.2%, set for a weekly climb of 1.5%.

Gold prices move Friday “reflects technical factors as we head into a holiday week,” said Rob Haworth, senior investment strategist for U.S. Bank Wealth Management. U.S. financial markets will be closed Thursday for the Thanksgiving Day holiday.

“U.S. dollar softness can explain some of it, and technical levels, including making a new high for the month,” he said. But “I still think [U.S. Federal Reserve] policy is the key factor and will limit gains into year-end.”

Gold gained as the ICE U.S. Dollar Index DXY, -0.26%  fell 0.3% to 93.675 in Friday trading. It’s ready for a weekly loss of 0.8%. The latest bout of dollar weakness followed a report in The Wall Street Journal Thursday that special counsel Robert Mueller’s team had issued a subpoena to President Donald Trump’s campaign in mid-October. Mueller is investigating whether Trump associates colluded with Russian efforts to meddle in the U.S. presidential election.

With these developments as backdrop, investors were tracking the likelihood that the Republican tax plan can advance. The focus is now on the Senate after the House passed a sweeping bill to overhaul the tax code on Thursday. A revised bill moving through the Senate Finance Committee differs in key aspects from the House measure, and would delay the corporate-rate tax cut until 2019. Tax policy and any impact on the economy is one factor under watch as financial markets sketch out the likely course for interest rates over coming months. Economic data remain important to monetary policy forecasts. On Friday, a reading on October U.S. housing starts showed a climb of 13.7% to a seasonally adjusted annual rate of 1.29 million.

Meanwhile, in a speech Thursday, Cleveland Fed President Loretta Mester said a “gradual path” for short-term interest rate increases “still remains the appropriate path of policy.”

Rising real interest rates impact the opportunity costs of holding gold because the metal provides no yield, giving investors incentive to rotate into riskier assets like stocks. Higher rates may also boost the value of the dollar which usually moves in the opposite direction of the gold price.

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