Gold remained close to a two-week peak on Tuesday, buoyed by a weaker dollar and apprehensions regarding the U.S. fiscal outlook, as investors looked forward to more U.S. economic data for insight into the interest rate trajectory.
In Dubai, the gold price saw a decline of AED9.25, with 24-carat gold priced at AED394.5, while 22-carat gold fell to AED361.5. Additionally, 21-carat gold dropped to AED345.25, and 18-carat gold decreased to AED296.00.
Spot gold showed little variation at $3,339.99 an ounce as of 02:28 GMT (currently above $3,330), with markets in the U.S. and London closed on Monday due to a holiday. U.S. gold futures decreased by 0.8 percent to $3,339.80 (currently above $3,361).
“At this point, we are seeing some consolidation in gold prices. The market is taking a breather and waiting for the next catalyst,” reported Reuters, quoting Kelvin Wong, a senior market analyst, Asia Pacific at OANDA. “However, market participants are concerned about the widening of that U.S. budget deficit that is a supporting factor for gold prices and that is also driving a dollar weakness as well.”
Dollar weakness boosts gold appeal
The dollar index eased by 0.3 percent to hover near a one-month low against its rivals, making gold priced in dollars more appealing for holders of other currencies.
Last week, the U.S. House of Representatives passed a version of Trump’s tax-cut bill, projected to add approximately $3.8 trillion to the federal government’s $36.2 trillion debt over the next decade, according to the Congressional Budget Office.
Meanwhile, U.S. President Donald Trump retreated from his threat to impose 50 percent tariffs on imports from the European Union next month, reinstating a July 9 deadline to facilitate discussions between Washington and the 27-nation bloc for a potential agreement.
This week, investors will also concentrate on speeches from various Federal Reserve policymakers and Friday’s U.S. core Personal Consumption Expenditures price index for insights on interest rates. Fed funds futures traders anticipate that the U.S. central bank is most likely to resume rate cuts in September.
Elsewhere, spot silver rose by 0.1 percent to $33.38 per ounce, platinum remained stable at $1,084.28, while palladium dipped by 0.3 percent to $984.25.
