Gold prices rose on Wednesday, reaching their highest levels in a week as the dollar weakened and investors sought refuge amid U.S. fiscal uncertainty, with Congress engaged in discussions about a sweeping tax bill.
In Dubai, gold price has risen, with 24-carat gold increasing by AED2.50 to AED399.00. Meanwhile, 22-carat gold saw a rise of AED2.25, reaching AED369.50. Additionally, 21-carat gold increased by AED0.50, bringing its price to AED352.75, while 18K gold remained steady at AED302.25.
Spot gold increased by 0.2 percent to $3,293.98 an ounce, as of 02:09 GMT (now above $3,303), following a peak earlier in the session that marked its highest level since May 12. U.S. gold futures climbed by 0.3 percent to $3,295.80 (currently trading above $3,305).
The dollar slipped to its lowest level since May 8, making gold priced in dollars more affordable for overseas buyers. “The general dollar index lost more than a full point in the last 24 hours as the Moody’s downgrade, plus skepticism about Trump’s tax bill continues to undermine the dollar,” reported Reuters, citing Marex analyst Edward Meir.
Read more: Dubai 24-carat gold price today falls AED2.75 amid dollar strength
Anticipated rate cuts
On Tuesday, Trump urged his fellow Republicans in the U.S. Congress to rally around a comprehensive tax-cut bill, yet he seemingly failed to sway a few holdouts who could obstruct a package that covers much of his domestic agenda. Gold, which is traditionally viewed as a safe-haven asset during times of political and economic uncertainty, tends to perform well in a low-rate environment. “Over the medium- to longer-term, further upside in gold is favored, though if any positive trade-deal headlines arise this could be an obstacle for gold in attempting to reclaim the $3,500 level,” stated Tim Waterer, KCM trade chief market analyst.
St. Louis Fed President Alberto Musalem informed the Economic Club of Minnesota that alleviating trade tensions would help maintain a robust labor market and keep inflation aligned with the Fed’s 2 percent target. Traders are now anticipating that the U.S. Fed will begin cutting rates again in October, projecting approximately 54 basis points of cuts by the end of 2025. Spot silver declined by 0.2 percent to $32.99 an ounce, while platinum decreased by 0.3 percent to $1,050.25. Palladium, however, rose by 0.5 percent to $1,017.93, reaching its highest level since February 4.
