NEW YORK: Gold prices rose to their highest in more than a week on Wednesday, supported by a weaker dollar and safe-haven demand as US President Donald Trump failed to convince Republican holdouts to back his tax bill.
Spot gold was up 0.3% at $3,298.19 an ounce, as of 1243 GMT. US gold futures climbed 0.5% to $3,300.40. “There’s been again a change in direction related to concern about the fiscal situation of the US and the driver has been the Moody’s downgrade, and the market was attracted by the level of $3,300 yesterday,” UBS analyst Giovanni Staunovo said.
“This fiscal concern is weighing on the dollar, and the weaker dollar is supporting gold prices,” Staunovo added. The dollar slipped to a two-week low against its rivals, making dollar-priced gold cheaper for holders of overseas currency.
In a closed-door meeting on Capitol Hill, Trump told Republicans in the House of Representatives not to press for further changes to the bill that would cut taxes and tighten eligibility for the Medicaid health programme. Investors also monitored developments in Russia-Ukraine peace talks, and any progress on trade deals ahead of the end of Trump’s 90-day tariff respites.
Gold, traditionally considered a safe-haven asset during political and economic uncertainty, rose to an all-time high of $3,500.05 per ounce last month, boosted by central bank buying, tariff war fears and strong investment demand.
Spot palladium was steady at $1,013.73 after hitting its highest level since February 4 earlier in the session. “Palladium has been starved of good news,” Tai Wong, an independent metals trader, said, citing Honda’s shift towards hybrids rather than EVs as “a decent reason”.
Palladium is a component of catalytic converters used in internal combustion engine or hybrid vehicles to reduce harmful emissions. Silver was up 0.1% at $33.10 an ounce, while platinum rose 0.4% to $1,057.57.
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