Gold prices remained steady during Wednesday’s Asian trading session, maintaining gains achieved over the last two days. The precious metal found support amid growing concerns about the U.S. fiscal deficit following the Senate’s approval of President Donald Trump’s expansive tax and spending package.
Uncertainty surrounding upcoming U.S. trade negotiations, especially with the July 9 tariff deadline approaching, also contributed to gold’s appeal as a safe-haven asset.
Spot gold hovered around $3,337.25 per ounce, while August gold futures slipped slightly by 0.1% to $3,347.40 per ounce as of 01:52 ET (05:52 GMT).
This week, gold prices have surged over 2%, recovering losses from last week when news of a ceasefire between Israel and Iran reduced demand for safe-haven investments.
Senate Approves Trump’s Tax and Spending Bill, Raising Debt Concerns
The Republican-controlled Senate narrowly passed a sweeping tax and spending bill on Tuesday. The legislation, which aims to cut taxes, reduce social welfare programs, and increase funding for defense and immigration enforcement, is expected to add approximately $3.3 trillion to the national debt.
The bill now heads to the House of Representatives for final consideration, with the goal of having it signed into law by President Trump before the July 4 Independence Day holiday.
Meanwhile, Federal Reserve Chair Jerome Powell reiterated on Tuesday that the central bank will closely monitor the effects of tariffs before deciding on any interest rate cuts, pushing back against Trump’s calls for aggressive easing.
Investors interpreted Powell’s remarks as mildly dovish since he did not dismiss the possibility of a rate cut as soon as next month.
Market attention now turns to Thursday’s U.S. nonfarm payrolls report, which will be crucial in assessing the likelihood of a rate reduction in July, although a cut in September is largely anticipated.
Trade Tensions and Tariff Deadline Add to Market Caution
Concerns about the U.S. fiscal deficit combined with expectations of lower interest rates have buoyed gold prices. The upcoming July 9 deadline for tariff decisions has further injected uncertainty, supporting demand for precious metals.
President Trump has indicated he does not plan to extend the tariff deadline and will inform countries about the specific tariffs they will face through official notifications.
He also mentioned that India might ease restrictions on U.S. companies, potentially paving the way for a trade agreement, though he expressed skepticism about reaching a deal with Japan.
Metal Markets Show Mixed Activity Amid Dollar Weakness
The U.S. Dollar Index remained weak during Asian trading, lingering near its lowest point since February 2022.
Despite this, metals markets showed muted activity as investors awaited clarity on trade negotiations and tariff developments.
Silver futures held steady at about $36.05 per ounce, while platinum futures edged up 0.2% to $1,369.05.
Copper prices were more active, with London Metal Exchange copper futures climbing 0.4% to $9,968.65 per ton, and U.S. copper futures rising 1.6% to $5.1165 per pound.
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