Gold prices rose in Asian trading on Friday, heading for a strong weekly gain as investors sought refuge amid a sell-off in U.S. Treasuries and growing worries over the country’s high government debt.
Spot gold increased 0.8% to $3,320.68 an ounce, while June gold futures rose 0.8% to $3,320.49 by early Friday ET. The spot price trading above futures suggested strong near-term demand.
The precious metal gained further support from heightened geopolitical tensions in the Middle East, particularly between Israel and Iran. However, these concerns were partly eased after the U.S. announced renewed nuclear negotiations with Tehran.
This week, spot gold is up 3.7%, marking its best performance since early April, as investors reacted to rising U.S. debt fears. The sell-off in Treasuries pushed yields higher and weighed on the U.S. dollar, benefiting gold and other commodities priced in dollars.
The fiscal outlook deteriorated after Moody’s downgraded the U.S. sovereign credit rating, fueling worries about the country’s debt burden. Additional pressure came from a tax cut and spending bill, supported by President Donald Trump, which narrowly passed the House on Thursday and is expected to increase the national debt by over $3 trillion in the next decade.
The weakening dollar helped boost broader metal prices. Silver futures gained 0.4% to $33.35 an ounce, poised for a weekly increase of more than 3%. Platinum rose 1.1% to $1,096.80 an ounce and is up over 10% this week following a sharp rally.
Industrial metals also benefited. London Metal Exchange copper futures climbed 0.2% to $9,530.75 a ton, up 0.8% for the week, while U.S. copper futures gained 0.5% to $4.70 a pound, rising 2.3% over the same period. The gains were supported by signals of additional stimulus measures in China, the world’s largest copper consumer.
