Gold prices rose to a two-week peak on Thursday as investors leaned toward the safe-haven asset amid mounting concerns over the US government’s growing debt and soft demand for 20-year Treasury bonds, highlighting low appetite for US assets.
Spot gold was up 0.7% at $3,336.43 an ounce, as of 0446 GMT, after hitting its highest level since May 9. US gold futures rose 0.7% to $3,337.60.
The dollar is hovering near a two-week low hit in the previous session, making greenback-priced gold cheaper for holders of overseas currency.
“Gold’s bullish reversal is supported by a weaker US dollar and lingering stagflation risks in the US economy,” said Kelvin Wong, senior market analyst, Asia Pacific at OANDA.
The Republican-controlled US House of Representatives Rules Committee on Wednesday voted to advance President Donald Trump’s sweeping tax-cut and spending bill, setting the stage for a vote on the House floor in the coming hours.
The US Treasury Department saw soft demand for a $16 billion sale of 20-year bonds on Wednesday, which is weighing not just the dollar but Wall Street as well, with traders already jittery after Moody’s cut the US triple-A credit rating last week.
“Gold seems to be resuming its longer-term uptrend after the break below $3,200 failed to hold. I’m looking for a year of the highs around $3,450-$3,500 from here,” said Ilya Spivak, head of global macro at Tastylive. Gold is seen as a safe investment amid economic and geopolitical turmoil and thrives in a low-rate environment.
On the geopolitical front, the fifth round of nuclear talks between Iran and the United States will take place on May 23 in Rome, Oman’s foreign minister said on Wednesday.
Spot silver rose nearly 1% to $33.66 an ounce, platinum fell 0.4% to $1,072.43 and palladium lost 1.4% to $1,023.50.
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