Amid Financial Concerns in the United States, Gold Holds onto Its Gains

SadaNews - Gold retained its gains as investors assessed the concerns surrounding the financial situation in the United States, after the Senate approved a tax package supported by President Donald Trump, valued at trillions of dollars.

The price of gold settled around $3,340 per ounce, after rising by 2% during the previous two sessions. The latest version of the President's major legislation, which is expected to expand the fiscal deficit by about $3.3 trillion over the next decade, is heading to the House of Representatives for approval.

If passed, this could enhance gold's appeal as a safe haven, as investors are already starting to rethink their asset allocation toward U.S. investments in light of Trump's controversial economic and trade agenda.

Dollar Weakness Supports Gold

Continued dollar weakness, trading at its lowest level since 2022, supported gold, offsetting pressure from rising Treasury yields after a report on Tuesday showed an increase in job opportunities in America.

Although rising yields generally represent a pressure factor for gold as a non-yielding asset, the decline in the dollar's value makes the metal cheaper for most buyers, given that it is priced in U.S. currency.

Gold has risen more than a quarter of its value since the beginning of the year and is currently about $160 away from its record high set in April, driven by strong demand for safe havens amid escalating geopolitical and trade tensions. Central bank purchases have also contributed to supporting this rise.

Spot gold showed little change, settling at $3,341.84 per ounce at 8:09 AM Singapore time. The Bloomberg U.S. Dollar Index fell by 0.1%, down 0.6% since the beginning of the week. Silver and palladium saw marginal increases, while platinum remained unchanged.

Anticipation for Jobs Data

In related news, the upcoming government jobs report for June, scheduled for release on Thursday, is expected to show a slowdown in non-farm job growth and an increase in the unemployment rate.

Federal Reserve policymakers have described labor market conditions as strong in recent weeks, and any signs of weakness could bolster calls for interest rate cuts, a scenario that typically benefits gold.

Investors also continued to monitor U.S. trade negotiations, as Trump stated he is not considering postponing the July 9 deadline for resuming higher tariffs.

However, there are indications that market participants are becoming less concerned about the President's volatile stance on tariffs, as the economy remains strong, and signs emerge that major U.S. companies are adapting to his policies at this time.