[BENGALURU] Gold prices rose on Wednesday (May 21) as the US dollar slipped to a two-week low and investors sought safety amid US fiscal uncertainty, with Congress debating a sweeping tax bill.
Spot gold was up 0.4 per cent at US$3,300.72 an ounce, as at 0035 GMT. US gold futures gained 0.6 per cent to US$3,304.
The US dollar retreated to its lowest level since May 8, making greenback-priced gold cheaper for overseas currency holders.
Trump on Tuesday pressed his fellow Republicans in the US Congress to unite behind a sweeping tax-cut bill, but apparently failed to convince a handful of holdouts who could still block a package that encompasses much of his domestic agenda.
Gold, traditionally considered a safe-haven asset during political and economic uncertainty, tends to thrive in a low-rate environment.
Federal Reserve officials said on Tuesday that higher prices are coming on the back of rising US import tariffs, with the question now whether the inflation shock will be fleeting or more persistent.
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Easing trade tensions, St Louis Fed president Alberto Musalem told the Economic Club of Minnesota, would allow the labour market to stay strong and inflation to remain on path to the Fed’s 2 per cent goal.
Traders now bet that the Fed will resume cutting rates in October and see around 54 basis points of cuts by the end of 2025.
Elsewhere, new intelligence obtained by the United States suggests that Israel is making preparations to strike Iranian nuclear facilities, CNN reported on Tuesday, citing multiple US officials familiar with the intelligence.
Spot silver rose 0.2 per cent to US$33.15 an ounce, platinum was steady at US$1,054.15 and palladium gained 0.1 per cent to US$1,014.54. REUTERS
