By Brijesh Patel and Ishaan Arora
(Reuters) – Gold slipped on Thursday after hitting a nearly two-week high earlier in the session, hurt by an uptick in the dollar, although worries over the U.S. government’s increasing debt burden and fiscal outlook kept prices above $3,300 level.
Spot gold was down 0.3% at $3,303.82 an ounce, as of 1020 GMT, after hitting its highest level since May 9 earlier in the session.
U.S. gold futures fell 0.3% to $3,304.10.
“Selling coming in especially from those looking to book profits and a degree of recovery in the dollar seems to have taken some of the shine off gold,” Ross Norman, an independent analyst said.
The dollar index edged up 0.2% against its rivals, making greenback-priced bullion more expensive for other currency holders. [USD/]
“There are concerns about the way the U.S. is managing its debt issue and one would expect gold to remain relatively firm if the markets take these tax cuts in a negative way,” Norman said.
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 fell 0.7% to $33.14 an ounce, platinum dropped 0.7% to $1,068.97 and palladium lost 2% to $1,015.97.
(Reporting by Brijesh Patel and Ishaan Arora in Bengaluru; Editing by Janane Venkatraman and Shailesh Kuber)
