Gold Rises as Weak Bond Auction Highlights US Fiscal Concerns
Gold rose for a fourth day, as investors rejected US President Donald Trump’s tax cut plans and a widening fiscal deficit, pushing long-term US Treasury yields near their highest in two decades.
Gold edged up in early Asian trade to around $3,325 an ounce. Safe-haven appetite has been buoyed amid risk-off sentiment for stocks, which has also fueled a decline in the US dollar.
The precious metal, which hit an all-time high last month and has risen more than a quarter this year, is up nearly 4% so far this week. The renewed support for bullion after its biggest weekly drop since November suggests investors are shifting focus from the immediate impact of tariffs to longer-term structural concerns about the US economy. On Wednesday, a lackluster auction of $16 billion in 20-year bonds highlighted concerns that Trump’s tax cuts will add trillions of dollars to already ballooning budget deficits at a time when appetite for US assets is waning worldwide.
That prompted investors to seek refuge in gold and other traditional safe havens, such as the yen and Swiss franc. Meanwhile, a weaker U.S. dollar also supported the precious metal by making it more affordable for investors using other currencies.
Gold rose 0.2% to $3,322.63 an ounce as of 8:42 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1%. Silver and palladium edged up, while platinum fell slightly.
Source: Bloomberg
