Gold prices continued their upward momentum for a fourth consecutive day on Thursday, climbing to two-week highs near US$3,350 as investors turned cautious ahead of key economic data and United States fiscal developments.
By 3:30 pm AEST (5:30 am GMT), spot gold had risen by $22.32, or 0.7%, to trade at $3,337.72 per ounce.
Persistent concerns over the U.S. fiscal outlook, unresolved U.S.-China trade issues, and fading hopes for a Russia-Ukraine ceasefire have kept pressure on the U.S. dollar, fuelling the latest rally in gold.
Market focus intensified after the U.S. House Rules Committee approved President Donald Trump's expansive tax-cut bill, clearing the path for a full vote on the House floor.
ANZ analysts highlighted in a client note: "The economic outlook remains challenging, with traders concerned that long-term yields will keep climbing amid budget wrangling in the U.S.
"U.S. House Speaker, Mike Johnson, said Republicans have reached an agreement to increase state and local tax deductions to USD40,000, suggesting a resolution to one of the final issues holding up President Trump’s economic bill."
The passage of the bill is widely expected to deepen the U.S. fiscal deficit, fuelling further weakness in the dollar and reinforcing the current gold rally.
Investor attention now turns to preliminary PMI readings from both the Eurozone and the U.S.
U.S. S&P Global Manufacturing PMI is forecast to decline slightly to 50.1 in May from 50.2 in April, while the Services PMI is expected to hold steady at 50.8.
Weaker-than-expected data could reinforce concerns about U.S. economic health, increasing the likelihood of further Federal Reserve rate cuts and pushing gold higher.
