By Brijesh Patel and Ishaan Arora
(Reuters) – Gold prices extended gains for the fourth straight session on Thursday, hitting a nearly two-week high, as worries over U.S. government’s increasing debt burden and fiscal outlook prompted investors to take shelter in the safe-haven metal.
Spot gold was up 0.3% at $3,324.91 an ounce, as of 0705 GMT, after hitting its highest level since May 9 earlier in the session.
U.S. gold futures rose 0.4% to $3,326.30.
“Investors worry about the US fiscal debt situation. The rally in gold started last week after Moody’s downgrade and extended into this week as we approached the decision to go for this big tax bill,” said Ole Hansen, head of commodity strategy at Saxo Bank.
“At the same time we’re seeing some weakness in the stock market and the dollar is weak as well. It seems like the correction in gold prices that was attempted in the last few weeks or the last month has run its course for now.”
Moody’s cut the United States’ top sovereign credit rating by one notch last week, citing concerns about its growing $36 trillion debt pile.
U.S. Treasury Department’s $16 billion sale of 20-year bonds met soft demand from investors on Wednesday, weighing on risk sentiment among investors in the Wall Street. [.N]
Market participants also worried that the U.S. government debt would swell by trillions of dollars if Congress passes President Donald Trump’s proposed tax-cut bill.
Gold is often used as a safe store of value during times of political and financial uncertainty.
The dollar index hovered near two-week low, making the bullion more attractive for other currency holders. [USD/]
Trump’s sweeping tax and spending bill cleared a crucial hurdle on Thursday, as the House of Representatives voted roughly along party lines to begin a debate that should lead to a vote on passage later in the morning.
Elsewhere, spot silver rose 0.3% to $33.49 an ounce, platinum rose 0.2% to $1,078.16 and palladium lost 0.7% to $1,030.28.
(Reporting by Brijesh Patel and Ishaan Arora in Bengaluru; Editing by Janane Venkatraman)
