Gold heads for weekly gain as US tax-cut bill stokes fiscal worries
Gold rose on Friday, poised for a weekly gain as investors sought safe-haven assets after the passage of U.S. President Donald Trump's tax-cut and spending bill in Congress raised fiscal concerns.
Spot gold rose 0.4% to $3,340.79 per ounce, as of 0424 GMT. Bullion is up more than 2% this week.
U.S. gold futures gained 0.3% to $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 U.S., 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 $3.4 trillion to the $36.2 trillion national debt over a decade.
Meanwhile, the labor market data showed U.S. firms added a more-than-expected 147,000 jobs in June and the unemployment rate fell to 4.1%, bolstering the case for the Federal Reserve to hold interest rates steady.
Trump announced that tariff rate letters would begin being sent out 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%-50%, later reducing most rates to 10% until July 9 to allow for negotiations.
Meanwhile, the U.S. dollar index (.DXY)
, opens new tab 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 $36.84 per ounce, platinum rose 1.4% to $1,386.16, and palladium fell 0.5% to $1,141.97.
Source: Reuters
