Gold prices up on weaker dollar
US gold futures gained 1.6% to $3,361.30. The US dollar weakened on Tuesday as Trump's massive tax-cut and spending bill stoked fiscal worries and combined with concern over trade deals to weigh on sentiment.
'It's just been a function of bargain hunting, dollar weakness (and) continued uncertainty about what's going to happen on the 9th of July,' that is moving gold, said Rhona O'Connell, head of market analysis for EMEA & Asia at StoneX.
Gold is likely to average $3000/oz for the fourth quarter and possibly even lower by year-end, O'Connell added. US Senate Republicans were struggling to pass Trump's sweeping tax and spending bill early in the day, amid deep divisions within the party over concern the legislation will add about $3.3 trillion to the nation's debt pile.
Gold is traditionally considered a hedge during times of political and economic uncertainty. On the trade front, Treasury Secretary Scott Bessent on Monday warned that countries could be notified of sharply higher tariffs as a July 9 deadline approaches, despite good-faith negotiations on trade deals.
Investors are also watching out for US ADP employment data due on Wednesday, and Thursday's payrolls data for cues on the Federal Reserve's interest rate policy path.
Fed Chair Jerome Powell, addressing a forum in Portugal, said the US economy was in a pretty good position. He added that excluding the tariffs, inflation was behaving as expected and hoped.
Markets are currently expecting two rate cuts totalling 50 basis points this year, starting in September. Lower rates boost gold's appeal as it yields no interest. Spot silver was up 0.6% to $36.30 per ounce, palladium gained 1.2% to $1,111.04, while platinum shed 0.1% to $1,350.78.
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