Gold Prices Steady Amid US Deficit Worries, Trade Uncertainty
Gold prices remained flat in Asian trading on Wednesday after two consecutive days of strong gains, buoyed by concerns over the expanding U.S. fiscal deficit following Senate approval of President Donald Trump’s expansive tax and spending legislation.
Ongoing uncertainty surrounding U.S. trade agreements ahead of Trump’s July 9 tariff deadline also helped sustain gold’s safe-haven appeal.
Spot gold held at $3,337.25 per ounce, while August gold futures dipped slightly by 0.1% to $3,347.40 as of 01:52 ET (05:52 GMT). Gold is up over 2% so far this week, recovering losses seen after the Israel-Iran ceasefire weakened demand for defensive assets.
Trump’s Spending Bill Raises Debt Concerns
Senate Republicans narrowly approved Trump’s sweeping tax-cut and spending proposal on Tuesday. The bill, which seeks to expand military and immigration enforcement funding while reducing social welfare programs and extending tax cuts, is projected to add $3.3 trillion to the national debt.
The legislation now heads to the House of Representatives, with Trump aiming to sign it into law by July 4.
Federal Reserve Chair Jerome Powell reiterated a wait-and-see approach regarding rate cuts in response to tariff-related inflation risks, resisting Trump’s pressure for immediate easing. Still, Powell’s comments were viewed as moderately dovish, leaving room for a possible cut in July. A rate reduction in September remains largely expected by markets.
Tariff Deadline Adds to Market Caution
Concerns about U.S. fiscal imbalances and prospects for lower interest rates continued to support gold prices. Meanwhile, uncertainty looms ahead of the July 9 deadline for countries to finalize trade deals with the U.S.
Trump has ruled out extending the deadline and said formal notices would soon be sent to countries affected by potential new tariffs. While he expressed some optimism about a deal with India, he was skeptical about reaching an agreement with Japan.
Metals Mixed as Dollar Nears Multi-Year Low
The U.S. Dollar Index stayed weak in Asian trade, hovering near its lowest level since February 2022, adding mild support to commodity prices. However, broader metal markets remained cautious as traders awaited clarity on tariffs and trade negotiations.
- Silver futures were flat at $36.05/oz
- Platinum edged up 0.2% to $1,369.05
- London copper gained 0.4% to $9,968.65/ton
- U.S. copper futures jumped 1.6% to $5.1165/pound
