Gold prices climbed 1% on Friday, capping a 4% gain for the week — the strongest weekly advance since early April.
Traders cited a softer U.S. dollar and growing investor concern about the nation’s fiscal outlook as key drivers of the rally. Recent passage of a large tax and spending bill has raised worries that borrowing could increase significantly, potentially adding trillions to the national debt and undermining confidence in fiscal stability.
As the dollar fell, bullion became cheaper for holders of other currencies, supporting demand. At the same time, uncertainty about long-term fiscal policy prompted some investors to seek the relative safety of gold, boosting prices across the market.
Market participants noted that the combination of weaker currency conditions and heightened fiscal risk often strengthens gold’s appeal as both a hedge against currency weakness and a store of value amid policy uncertainty. Analysts said the metal’s performance this week reflects those dynamics, with inflows into gold-related investments helping to sustain the rally.
Looking ahead, further moves in the dollar, changes in interest rate expectations, and any new fiscal developments are likely to influence gold’s near-term trajectory. For now, the metal has benefited from a shift in sentiment that favors safe-haven assets amid concerns over the government’s fiscal path.