Spot Gold drifted lower on Tuesday, but held not far from a 2-week high of $3,366.00, as soft US Dollar and concerns over the US fiscal outlook were providing support.
“At this point, we are seeing some consolidation in gold prices. The market is taking a breather and waiting for the next catalyst,” Kelvin Wong, senior market analyst, Asia Pacific at OANDA, was quoted as saying by Reuters.
“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.”
Last week, US House of Representatives passed a version of President Trump’s tax-cut bill, which is estimated to add nearly $3.8 trillion to the government’s $36.2 trillion debt over the upcoming ten years.
Meanwhile, US President Donald Trump has rescinded his threat to impose a 50% tariff on EU imports in June and extended his deadline for trade negotiations until July 9th.
This week, investor focus will likely be on US PCE inflation figures for more clues on the Federal Reserve’s interest rate trajectory.
Spot Gold was last down 0.98% on the day to trade at $3,309.74 per troy ounce.
The US Dollar Index hovered above a one-month trough, being last up 0.08% to 99.016.
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