WASHINGTON: Gold prices rose on Friday and were on track for a weekly gain, as investors turned to safe-haven assets amid growing concerns over the United States’ fiscal outlook and new trade measures announced by President Donald Trump.
Spot gold climbed 0.4 per cent to $3,340.79 an ounce by 0424 GMT, lifting its weekly rise to more than 2 per cent. US gold futures were also higher, up 0.3 per cent at $3,351.
The gains followed the passage of Trump’s sweeping tax and spending package through Congress on Thursday. The legislation makes his 2017 tax cuts permanent, introduces fresh tax breaks tied to his 2024 campaign, and funds stricter immigration policies.
However, the move has triggered concern over the country’s ballooning deficit. According to the Congressional Budget Office, the bill is expected to add $3.4 trillion to the current $36.2 trillion national debt over the next ten years.
Analysts say the fiscal strain could pressure the dollar and support gold prices in the longer term.
“We’re not making any progress on getting our fiscal house in order here in the US, so in the longer run, it should be bearish for the dollar and bullish for gold,” said Edward Meir, analyst at Marex.
In parallel, US economic data showed strength in the labour market. Employers added 147,000 jobs in June, surpassing expectations, while the unemployment rate dipped to 4.1 per cent. The solid report is likely to support the Federal Reserve’s current stance on keeping interest rates unchanged.
Adding to the uncertainty, Trump confirmed on Friday that letters outlining new tariff rates would begin going out, hinting at a departure from bilateral trade deals. If he follows through with the July 9 tariff deadline, analysts believe the dollar could weaken further, giving another boost to gold.
The US dollar index was heading for its second straight weekly decline, making precious metals more attractive to international buyers.
Elsewhere in the metals market, silver remained steady at $36.84 per ounce, platinum gained 1.4 per cent to $1,386.16, while palladium slipped 0.5 per cent to $1,141.97.
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