Gold prices rose 1% on Friday and were on track for their best week in six, boosted by a weaker dollar and as worries over the United States’ worsening fiscal health sent investors towards safe-haven bullion.
Spot gold was up 1% at $3,325.47 an ounce as of 1119 GMT. Bullion has risen 4% this week, its highest since April 7.
US gold futures gained 0.9% to $3,325.10.
President Donald Trump’s tax bill is supporting gold as there are concerns that this is negative for the fiscal situation of the dollar and some investors are diversifying out of treasury into gold, UBS analyst Giovanni Staunovo said, Reuters reported.
“We have also seen the 30-year Treasury bills rising strongly in recent weeks, so this shows caution regarding the fiscal situation as well and in this environment, obviously an asset being perceived as a safe haven is benefiting.”
The dollar slipped 0.5% and was heading for its biggest weekly drop since April 7, making greenback-priced gold cheaper for holders of other currencies.
The Republican-controlled US House of Representatives on Thursday passed a sweeping tax and spending bill that would enact much of Trump’s policy agenda and saddle the country with trillions of dollars more in debt.
Last week, Moody’s cut the United States’ top sovereign credit rating by one notch, citing concerns about its growing $36 trillion debt pile.
Recent concerns about the US deficit has weighed on risk appetite among investors this week, lifting demand for assets such as gold. Gold is used as a safe store of value during political and financial uncertainty.
On the technical front, Spot gold is expected to retest a resistance of $3,335 per ounce, a break above which could lead to a gain to $3,366, according to Reuters technical analyst Wang Tao.
Elsewhere, spot silver was steady at $33.07 an ounce, platinum gained 0.8% to $1,089.45 and palladium slipped 0.8% to $1,006.75.
