Markets on Alert! Gold Holds Ahead of US Economic Surprise
Gold steadied as investors weighed concerns about the US fiscal position along with the outlook for the Federal Reserve’s monetary easing path ahead of key economic data.
Bullion was little changed near $3,330 an ounce after rising 2% over the previous two sessions after the Senate passed President Donald Trump’s multitrillion-dollar tax bill on Tuesday. The legislation, which is expected to widen the deficit by $3.3 trillion over the next decade, now heads to the House. If passed, it could benefit gold’s appeal as a haven.
Investors are also focused on the June US jobs report due on Thursday. The figures are expected to show a slowdown in payroll growth and a rise in unemployment, which could strengthen the case for a Fed cut. This would follow a stronger-than-expected jobs print on Tuesday that dampened expectations for a July cut. Lower borrowing costs tend to benefit non-yielding commodities.
Gold has gained more than a quarter this year, and is trading about $170 below a record set in April, supported by demand for safe-haven assets as investors grapple with rising geopolitical and trade tensions. The rally has also been supported by robust central bank buying, as well as inflows into bullion-backed exchange-traded funds.
Meanwhile, investors are keeping a close eye on U.S. trade talks, with Trump saying he is not considering delaying a July 9 deadline for higher tariffs. However, there are signs that traders are becoming less concerned about the president’s unpredictable stance on levies, as the economy remains generally healthy.
Spot gold was little changed at $3,330.13 an ounce at 8:19 a.m. in London. The Bloomberg Dollar Spot Index edged up 0.1%, but is down 0.5% so far this week. Silver and platinum were flat, while palladium rose.
Source: Bloomberg
