Trump Tax Bill Passage Drives Gold Prices Higher

Spot gold prices rose 0.33% to $3,337.15 per ounce on Friday (local time). Gold futures also climbed 0.11% to $3,346.50, bringing the week's cumulative gain to approximately 1.7%.

The primary driver behind gold's rise is growing concern over U.S. fiscal health following passage of President Donald Trump's tax cut and spending bill through Congress. The legislation makes permanent the 2017 tax cuts and includes additional tax reductions promised during the 2024 presidential campaign.

$3.4 Trillion Debt Increase Projected

The nonpartisan Congressional Budget Office (CBO) estimates the bill will increase U.S. national debt by $3.4 trillion over the next decade.

Edward Meir, analyst at Marex, noted that "there has been no progress whatsoever in improving U.S. fiscal health," predicting "long-term dollar weakness and rising gold prices."

Uncertainty Persists Despite Strong Employment Data

Thursday's U.S. employment figures exceeded expectations. June job growth reached 147,000, while the unemployment rate unexpectedly fell to 4.1%. This increases the likelihood that the Federal Reserve will maintain current interest rates for the time being.

However, trade tensions appear set to reignite as President Trump announced Friday he would begin sending letters to countries specifying tariff rates. This represents a retreat from his earlier commitment to pursue bilateral trade negotiations.

Tariff Policy Uncertainty as Market Variable

President Trump imposed reciprocal tariffs of 10-50% on April 2, but subsequently reduced most to 10% until July 9 to allow time for negotiations.

Analyst Meir forecasts that "if Trump holds firm to the July 9 deadline and re-erects tariff barriers, the dollar will certainly weaken and gold prices are likely to move higher."

Gold, which yields no interest, functions as a safe-haven asset during geopolitical and economic uncertainty, with a strong tendency to appreciate in low-interest-rate environments.

Other Precious Metals Market Movements

As of Friday, silver prices fell 0.5% to $36.66 per ounce. Platinum rose 0.7% to $1,376.67, while palladium declined 0.6% to $1,130.60.