GOLD rose on Friday, poised for a weekly gain as investors sought safe-haven assets after the passage of US President Donald Trump’s tax-cut and spending bill in Congress raised fiscal concerns.
Spot gold rose 0.4 per cent to US$3,340.79 per ounce, as of 0424 GMT. Bullion is up more than 2 per cent this week.
US gold futures gained 0.3 per cent to US$3,351.
Trump’s tax-cut legislation cleared its final hurdle in Congress on Thursday, making his 2017 cuts permanent, funding his immigration crackdown, and adding new 2024 campaign tax breaks.
Through this bill, “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,” Marex analyst Edward Meir said.
The nonpartisan Congressional Budget Office estimates the legislation would add US$3.4 trillion to the US$36.2 trillion national debt over a decade.
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Meanwhile, the labor market data showed US firms added a more-than-expected 147,000 jobs in June and the unemployment rate fell to 4.1 per cent, bolstering the case for the Federal Reserve to hold interest rates steady.
Trump announced that tariff rate letters would begin being sent out on Friday, marking a shift from earlier plans for individual trade deals.
If Trump sticks to the July 9 tariff deadline, the dollar will likely weaken and gold could rise, Meir said.
On April 2, Trump announced reciprocal tariffs of 10 to 50 per cent, later reducing most rates to 10 per cent until July 9 to allow for negotiations.
Meanwhile, the US dollar index headed for its second consecutive weekly loss, making gold cheaper for overseas buyers.
Non-yielding bullion, a safe-haven asset, typically performs well when interest rates are low.
Spot silver was steady at US$36.84 per ounce, platinum rose 1.4 per cent to US$1,386.16, and palladium fell 0.5 per cent to US$1,141.97. REUTERS
