Gold prices rose to a two-week high on Thursday, as investors leaned toward the safe-haven asset amid growing concerns about rising U.S. government debt and weak demand for 20-year Treasury bonds, highlighting low demand for U.S. assets, UNN reports, citing Reuters.
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Spot gold rose 0.7% to $3336.43 per ounce at 04:46 GMT (07:46 Kyiv) after reaching its highest level since May 9.
U.S. gold futures rose 0.7% to $3337.60.
The dollar is hovering near a two-week low hit in the previous session, making dollar-denominated gold cheaper for holders of foreign currency.
"The bullish reversal in gold is supported by a weaker US dollar and persistent stagflation risks in the US economy," said Kelvin Wong, senior market analyst for Asia-Pacific at OANDA.
The Republican-controlled U.S. House Rules Committee on Wednesday voted to advance President Donald Trump's bill to massively cut taxes and spending, setting the stage for a House vote in the near future.
The U.S. Treasury Department on Wednesday saw weak demand for its sale of $16 billion in 20-year bonds, putting pressure not only on the dollar but also on Wall Street, as traders are already nervous after Moody's downgraded the U.S. credit rating from AAA last week.
"Gold appears to be resuming its long-term uptrend after the break below $3,200 failed to hold. I expect year highs around $3,450-3,500," said Ilya Spivak, head of global macro at Tastylive.
Gold is considered a safe investment in times of economic and geopolitical upheaval and thrives in low-rate environments.
On the geopolitical front, the fifth round of nuclear talks between Iran and the United States will take place on May 23 in Rome, Oman's foreign minister said on Wednesday.
Spot silver rose nearly 1% to $33.66 per ounce, platinum fell 0.4% to $1072.43, and palladium lost 1.4% to $1023.50.