Gold rises to its highest weekly level supported by the decline of the dollar and tax uncertainties.
Gold markets witnessed a strong uptrend today, Wednesday, May 21st, with prices reaching their highest levels in a week, supported by the weakening US dollar and increased demand for the yellow metal as a safe haven amidst uncertainty surrounding the US tax reform project.
Gold in spot trading rose by 0.4% to reach $3304.24 per ounce, its highest price since May 12th. Additionally, gold futures in the US market jumped by 0.6% to $3305.30 per ounce.
This strong performance can be attributed to two main factors: the weakness of the US dollar, which hit its lowest levels since May 8th, increasing the attractiveness of gold to foreign investors, along with financial concerns arising from the ongoing debate in the US Congress regarding the tax law project and the repercussions of Moody's credit rating downgrade.
In this regard, Edward Meir, an analyst at "Marex," told Reuters: "The dollar index lost more than a full point over the past 24 hours, influenced by Moody's rating and doubts about the tax law project proposed by President Trump, weakening confidence in the US currency."
On the other hand, Tim Waterer, Senior Market Analyst at "KCM," pointed out that "gold may see further increases in the medium and long term, although any positive developments regarding trade deals may hinder its achievement of the $3500 level."
This comes at a time when US President Donald Trump is facing internal challenges in passing his tax bill, after failing to gain the support of all Republican party members, as some opponents are still able to obstruct the law's approval.
As for other precious metals, silver experienced a slight decline of 0.2% to $32.99 per ounce, while platinum dropped by 0.3% to $1050.25. Conversely, palladium rose by 0.5%, reaching $1017.93, its highest level since February 4th.
