Quick overview

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The bullion asset glowed brightly near two high amid evolving market dynamics.

 

Rising geopolitical tensions and political unpredictability fuel strong demand for the safe-haven asset, which is propelling the yellow metal higher as Middle East tensions escalate and Trump confronts domestic challenges. Following a new wave of risk-off sentiment due to reports that Israel is considering striking Iran’s nuclear facilities, gold futures are currently trading near $3,340 as of this writing on Wednesday.

The fact that US President Donald Trump is facing internal congressional opposition to his proposed fiscal package boosted gold bugs’ morale. The US dollar has been trending lower because of ongoing US fiscal problems

President Donald Trump’s comprehensive tax-cut and spending bill was approved by the Republican-controlled US House of Representatives Rules Committee, paving the way for a floor vote. The nation’s already substantial debt load could rise by an additional $3 trillion to $5 trillion because of the eagerly awaited “One Big, Beautiful Bill.”.

Additionally, weak demand at a pivotal auction of 20-year Treasury bonds on Wednesday suggests mounting concerns that the tax and spending bill will exacerbate the US budget deficit more quickly than anticipated. This follows the US sovereign credit rating  Moody’s downgrade from the highest “Aaa” rating.

The greenback is still declining due to speculation that the Fed will cut interest rates further this year, weakening inflation, and a bleak growth outlook, which helped the non-yielding gold price reach a nearly two-week high on Thursday. After the US released guidelines cautioning businesses against using Huawei’s Ascend AI chips, China accused the US of violating the Geneva trade agreements and abusing export control measures.

China’s Commerce Ministry described the US’s actions on advanced chips as “typical unilateral bullying and protectionism.”. Israel’s military persisted in bombarding the Gaza Strip and obstructing much-needed food aid on the geopolitical front. Furthermore, Trump allegedly informed European leaders.