Softer dollar and mounting concern over the deteriorating fiscal outlook for the US boosts metal’s safe-haven appeal
23 May 2025 - 07:35
byAnushree Mukherjee
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Bengaluru — Gold prices were poised on Friday for their best weekly gain in more than a month, as a softer dollar and mounting concerns over the deteriorating fiscal outlook for the world’s biggest economy boosted bullion's safe-haven appeal.
Spot gold was up 0.3% at $3,303.09/oz by 404 GMT. Bullion has risen 3% so far this week and is on track for its best weekly performance since April 7.
US gold futures added 0.2% to $3,302.80.
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 US’s fiscal situation, and the resulting hesitancy towards US assets has put gold back in the frame with investors,” said Tim Waterer, chief market analyst, KCM Trade.
“Gold can likely maintain its foothold above the $3,000 level while tariff, US debt and geopolitical [tension] remain swirling about financial markets.”
The Republican-controlled US 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 US treasury department saw soft demand for a $16bn sale of 20-year bonds. Investor sentiment was already fragile after Moody’s downgraded the US 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 US would bear legal responsibility for any Israeli attack on Iranian nuclear facilities, after a CNN report that Israel was preparing strikes on Iran.
Spot silver edged 0.2% higher to $33.13/oz, platinum firmed 0.4% to $1,085.89 and palladium lost 0.5% to $1,009.69.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold set for best week in one-and-a-half months
Softer dollar and mounting concern over the deteriorating fiscal outlook for the US boosts metal’s safe-haven appeal
Bengaluru — Gold prices were poised on Friday for their best weekly gain in more than a month, as a softer dollar and mounting concerns over the deteriorating fiscal outlook for the world’s biggest economy boosted bullion's safe-haven appeal.
Spot gold was up 0.3% at $3,303.09/oz by 404 GMT. Bullion has risen 3% so far this week and is on track for its best weekly performance since April 7.
US gold futures added 0.2% to $3,302.80.
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 US’s fiscal situation, and the resulting hesitancy towards US assets has put gold back in the frame with investors,” said Tim Waterer, chief market analyst, KCM Trade.
“Gold can likely maintain its foothold above the $3,000 level while tariff, US debt and geopolitical [tension] remain swirling about financial markets.”
The Republican-controlled US 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 US treasury department saw soft demand for a $16bn sale of 20-year bonds. Investor sentiment was already fragile after Moody’s downgraded the US 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 US would bear legal responsibility for any Israeli attack on Iranian nuclear facilities, after a CNN report that Israel was preparing strikes on Iran.
Spot silver edged 0.2% higher to $33.13/oz, platinum firmed 0.4% to $1,085.89 and palladium lost 0.5% to $1,009.69.
Reuters
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