Gold Prices Rise as Investors Flock to Safe Havens Amid Approval of US Tax Law
Gold prices witnessed a significant rise today, Friday, July 4, heading towards achieving weekly gains of about 2%, as investors turn to safe-haven assets following the approval by the US Congress of a tax cut and spending bill proposed by President Donald Trump, raising concerns about financial stability.
According to available data, the price of gold in spot transactions rose by 0.4% to reach $3340.79 per ounce by 04:24 GMT, while US gold futures increased by 0.3% to $3351 per ounce.
The Republican-dominated US House of Representatives on Thursday approved the massive tax cut bill, which is considered the final step in passing the legislation within Congress. This law is expected to fund President Trump's domestic program, but it may also lead to "depriving millions of Americans of health insurance benefits," according to expert estimates.
The Congressional Budget Office (a non-partisan independent entity) indicated that this legislation will increase the current US national debt of $36.2 trillion by $3.4 trillion over the next decade.
In a related context, the latest US labor market data revealed the addition of 147,000 new jobs in June, surpassing expectations, while the unemployment rate unexpectedly dropped to 4.1%. These indicators have reinforced expectations for the Federal Reserve to keep interest rates unchanged.
On the other hand, President Trump announced that his administration will start sending letters to several countries as of today, Friday, to determine the tariff rates imposed on imports, which may escalate global trade tensions.
As for other precious metals, silver remained at $36.84 per ounce, while platinum rose by 1.4% to reach $1386.16, and palladium fell by 0.5% to $1141.97.
