Gold Heads for Weekly Gain as US Tax-Cut Bill Stokes Fiscal Worries

SEATTLE (Scrap Monster): Gold prices rose on Friday and were set for a weekly gain as investors sought safe-haven assets amid fiscal concerns after the U.S. Congress passed President Donald Trump's tax-cut and spending bill, while a weaker dollar aided further.

Spot gold rose 0.5% to $3,343.94 per ounce, as of 0617 GMT. Bullion is up about 2.2% this week.

U.S. gold futures gained 0.3% to $3,354.

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.

The U.S. dollar index headed for its second consecutive weekly loss, making gold cheaper for overseas buyers.

Trump announced that tariff rate letters would start being sent out on 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, 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.

Demand for physical gold remained subdued in major Asian markets this week as elevated prices weighed on consumer interest, while discounts in India narrowed due to lower imports.

Spot silver was steady at $36.83 per ounce, platinum rose 0.9% to $1,382.63, and palladium fell 0.4% to $1,132.87.

Courtesy: www.reuters.com