Gold hovers near two-week high on dollar weakness, US fiscal woes
Gold hovered close to a two-week high on Tuesday, supported by a weaker dollar and concerns over the U.S. fiscal outlook, while investors awaited more U.S. economic data for more clarity on interest rate trajectory.
Spot gold was little changed at $3,339.99 an ounce, as of 0228 GMT. Markets in the U.S. and London were closed on Monday for a holiday.
U.S. gold futures fell 0.8% to $3,339.80.
"At this point, we are seeing some consolidation in gold prices. The market is taking a breather and waiting for the next catalyst," said 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."
The dollar index eased 0.3% to hover near one-month low against its rivals, making greenback-priced gold more attractive for other currency holders.
The U.S. House of Representatives last week passed a version of Trump's tax-cut bill that is calculated to add about $3.8 trillion to the federal government's $36.2 trillion in debt over the next decade, according to the Congressional Budget Office.
Meanwhile, U.S. President Donald Trump backed away from his threat to impose 50% tariffs on imports from the European Union next month, restoring a July 9 deadline to allow for talks between Washington and the 27-nation bloc to produce a deal.
Investors' focus this week will also be on speeches from a slew of Federal Reserve policymakers and Friday's U.S. core Personal Consumption Expenditures price index, for interest rate clues.
Fed funds futures traders see the U.S. central bank as most likely resuming rate cuts in September.
Elsewhere, spot silver gained 0.1% to $33.38 per ounce, platinum was steady at $1,084.28 and palladium eased 0.3% to $984.25.
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