Gold rates stable amid geopolitical and economic shifts

Gold prices inched up on Friday, July 4, as fiscal concerns in the US and expectations of stable interest rates supported demand for the yellow metal.

Spot gold rose 0.1% to $3,329.67 per ounce as of 02:21 GMT. For the week, prices have gained 1.7%. However, US gold futures slipped 0.1% to $3,339.30 an ounce.

In India, 24 karat gold is priced at ₹9,873 per gram. Rates for 22 karat and 18 karat gold stood at ₹9,050 and ₹7,405 per gram respectively, according to Goodreturns.

The rise in global prices followed the passage of US President Donald Trump’s tax and spending bill in Congress. The bill aims to make his 2017 tax cuts permanent and introduces new tax breaks, sparking concerns over the country’s fiscal outlook.

“The US isn’t making much progress on fiscal discipline. In the long run, that’s bearish for the dollar and bullish for gold,” said Edward Meir, analyst at Marex.

The Congressional Budget Office estimates the new legislation will add $3.4 trillion to the US debt over the next decade. The debt currently stands at $36.2 trillion.

Adding to the uncertainty, Trump confirmed that letters outlining tariff rates on imports will begin rolling out today. Markets worry that renewed tariffs could weaken the dollar, potentially pushing gold higher.

Meanwhile, fresh data showed that US firms added 147,000 jobs in June, beating expectations. The unemployment rate dropped to 4.1%, reinforcing the view that the Federal Reserve may keep interest rates unchanged.

““Gold is expected to trade in a broader range of ₹95,500 – ₹98,500 per 10 grams in the near term,” said Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities.

Investors continue to view gold as a safe-haven asset, especially during periods of economic or geopolitical uncertainty. Lower interest rates also enhance its appeal as it does not yield any income.

-With Reuters inputs