Gold Gains On Budgetary Worries And Trade Concerns

(RTTNews) - Gold extended gains on Wednesday, driven by weakness in the US dollar which is losing value due to ongoing US fiscal concerns and global trade uncertainty.

Front Month Comex Gold for July delivery gained $11.30 (or 0.34%) to $3,348.00 per troy ounce today.

Front Month Comex Silver for July delivery gained $34.40 (or 0.95%) to $36.426 per troy ounce today.

The US Senate passed a mega tax-and-spending bill on Tuesday which will now be debated in the House of Representatives. If the bill becomes a law, it is projected to add $3.3 trillion over the next 10 years to the already-swollen national debt.

As central banks have reduced their dollar exposure in recent days, from January to June period, the US Dollar index has plummeted by around 10.8 percent.

A report released by ADP revealed that private businesses in the US shed 33,000 jobs in June, the first decline since March. Annual pay growth for job-stayers edged down to 4.4% in June from 4.5% in May.

Last week, Federal Reserve Chair Jerome Powell hinted at adopting a "wait-and-watch" approach to interest rate cuts.

Notably, President Donald Trump publicly urged the Fed to lower rates. Expressing his displeasure over this, he even announced considering replacing the current Chair soon.

As the tariff deadline of July 9 is fast approaching, markets are now focused on the deal-rush that US trading partners are engaging in.

On a positive note, Canada has announced a deal before July 21; China has already announced constructing a framework for deal based on last month's Geneva agreement; and Trump himself announced of a "good deal" with India. EU is preparing to make concessions to sign a deal with US.

On the geopolitical front, in the Middle East, the ceasefire brought out by Trump on June 24th between regional rivals Israel and Iran, is holding so far. The possibility of US-Iran nuclear talks is also up in the air.

The US non-farm payrolls data is awaited tomorrow. If the data indicates weak growth, it could tip the scales towards easing interest rates.

Analysts state that the yellow metal price would move based on the US Fed's decisions.