Safe-haven gold rises over 1% as Trump’s tax cut and spending bill passes in US Senate

Gold climbed more than 1% on Tuesday as investors sought safe-haven assets after US President Donald Trump’s “big, beautiful bill” passed in the Senate, ahead of the July 9 deadline for trade tariffs.

Spot gold rose 1.1% to USD 3,338.24 per ounce, as of 2:25 p.m. EDT (1825 GMT), its highest level since June 24. US gold futures settled 1.3% higher at USD 3,349.8.

The Republican-controlled US Senate voted on Tuesday to pass a wide-ranging tax-cut and spending bill sought by Trump, which would cut several social service programmes.

“The budget bill that passed is providing support because it seems that it will contribute to a deficit of USD 3 trillion over the next 10 years,” Marex analyst Edward Meir said.

“This is both to some extent inflationary, and more importantly, it will increase the debt burden that we have to service with more financing, more borrowing and all of these things are constructive for a stronger gold market.”

Gold, considered a store of value, tends to thrive on political and economic uncertainty.

US Treasury Secretary Scott Bessent warned that countries could be notified of sharply higher tariffs despite good-faith negotiations as July 9 approaches, when tariff rates are scheduled to revert from a temporary 10% level to Trump’s suspended rates of 11% to 50%.

Investors are watching out for US ADP employment data due on Wednesday, and Thursday’s payrolls data to gauge the Federal Reserve’s policy path.

Fed Chair Jerome Powell said that excluding the tariffs, inflation was behaving as expected and hoped.

Markets are currently expecting two rate cuts totaling 50 basis points this year, starting in September.

Lower rates boost non-yielding gold’s appeal.

Gold is likely to average USD 3000/oz for the fourth quarter and possibly even lower by year-end, said Rhona O’Connell, head of market analysis for EMEA & Asia at StoneX.

Spot silver was up 0.1% at USD 36.11 per ounce, while palladium was flat at USD 1,097.16, and platinum fell 0.7% to USD 1,342.78.

(Reporting by Sarah Qureshi in Bengaluru; Editing by Sharon Singleton and Alan Barona)