Gold was set for its best weekly gain in more than a month on Friday, as a softer dollar and mounting concerns about the deteriorating fiscal outlook for the world’s biggest economy boosted the metal’s safe-haven appeal.
Spot gold gained 0.3% to $3,303.92 an ounce as of 0204 GMT.
Bullion has risen 3% so far this week and is on track for its best weekly performance since early April.
U.S. gold futures added 0.2% to $3,303.00.
The dollar has lost more than 1% so far this week and is set for its worst weekly performance since April 7, making greenback-priced gold cheaper for holders of other currencies.
“This week, trade optimism has somewhat given way to worries about the U.S.’s fiscal situation, and the resulting hesitancy towards U.S. assets has put gold back in the frame with investors,” said KCM Trade’s Chief Market Analyst, Tim Waterer.
“Gold can likely maintain its foothold above the $3,000 level while tariff, U.S. debt and geopolitical (tension) remain swirling around financial markets.”
The Republican-controlled U.S. House of Representatives passed a sweeping tax and spending bill on Thursday, embedding much of President Donald Trump’s policy agenda and adding trillions of dollars more to the national debt.
What Trump dubbed a “big, beautiful bill”, is now headed to the Senate, which Republicans control by a 53-47 margin.
On Wednesday, the U.S. Treasury Department saw soft demand for a $16 billion sale of 20-year bonds. Investor sentiment was already fragile after Moody’s downgraded the U.S. triple-A credit rating last week.
Gold is used as a safe store of value during political and financial uncertainty.
Meanwhile, Iran’s Foreign Minister Abbas Araqchi warned that the U.S. would bear legal responsibility for any Israeli attack on Iranian nuclear facilities, following a CNN report that Israel is preparing strikes on Iran.
Spot silver rose 0.1% to $33.12 an ounce, platinum firmed 0.4% to $1,084.99 and palladium lost 0.1% to $1,013.63.
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