Gold Prices Rebound Amid US Deficit Concerns and Tariff Uncertainty

Gold prices edged higher in Asian trading on Friday, rebounding from sharp losses in the previous session, as concerns over the U.S. fiscal deficit and looming trade tensions supported demand. Spot gold rose 0.5% to $3,341.34 per ounce, while August gold futures gained 0.2% to $3,349.52.

Despite falling nearly 1% on Thursday after a stronger-than-expected U.S. jobs report dampened hopes of a July rate cut, gold remained on track for a 1.8% weekly gain—its first in three weeks. The robust jobs data reduced market expectations of a near-term Federal Reserve policy shift, strengthening the U.S. dollar and briefly weighing on bullion.

However, market sentiment was bolstered by renewed worries over the U.S. fiscal outlook. On Thursday, Congress passed President Trump’s sweeping tax bill, which includes deep tax cuts and reduced social spending. The Congressional Budget Office estimates the bill could add $3.4 trillion to the $36.2 trillion national debt. This added to safe-haven appeal for gold, which tends to benefit from fiscal instability.

Further supporting gold were escalating trade tensions. Trump announced that starting Friday, the U.S. would begin issuing letters to over 170 countries outlining new unilateral export tariffs between 20% and 30%, abandoning multilateral negotiations. While deals with the UK, Vietnam, and a limited framework with China are in place, broader uncertainty boosted investor demand for gold as a hedge.

In other metals, platinum futures climbed 0.5% to $1,385.80 per ounce, while silver futures slipped 0.3% to $37.00. Copper saw mixed moves—LME copper dipped 0.3% to $9,923.65 per ton, and U.S. copper futures fell 0.4% to $5.115 per pound. The U.S. Dollar Index dipped 0.1% but held onto gains from the jobs data.