Gold prices climb on safe-haven demand and weaker dollar
NEW YORK, May 22: Gold prices rose for a third straight session on Wednesday, reaching a one-week high, supported by a weakening US dollar and growing safe-haven demand amid ongoing economic and geopolitical uncertainty.
As of 1:55 p.m. ET (5:55 p.m. GMT), spot gold gained 0.7% to trade at $3,312.77 per ounce, while US gold futures closed 0.9% higher at $3,313.50.
The US dollar index (.DXY) fell 0.6% against a basket of major currencies, making gold more affordable for holders of foreign currencies and bolstering demand.
Meanwhile, Wall Street's major indexes dipped, and government bond yields rose as investors monitored the ongoing debate over former US President Donald Trump's tax-cut bill, which has fueled concerns about the nation's mounting debt.
'We are kind of paused here in mid-range between the high and recent low, waiting for a signal of more trade and tariff deals,' said Daniel Pavilonis, senior market strategist at RJO Futures.
Despite a temporary easing in US-China trade tensions, the economic outlook for the U.S. remains weak, according to a Reuters poll of economists.
In geopolitical developments, CNN reported on Tuesday that new intelligence suggests Israel is preparing to strike Iranian nuclear facilities. This comes even as the US administration continues discussions with Iran over its uranium enrichment program.
Gold is widely regarded as a safe-haven asset during times of economic or geopolitical instability. Bullion prices reached a record high of $3,500.05 last month.
'We expect gold's recent price dip will stimulate investment buying, as macroeconomic and geopolitical uncertainty linger,' analysts at ANZ said in a note.
Silver also posted gains, rising 0.8% to $33.32 per ounce.
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