Investing.com - Gold prices rose to a three-week high during European morning hours on Wednesday, as growing doubts about U.S. President Donald Trump's pro-growth economic agenda prompted investors to dump risky assets and rush to safe havens.
Comex gold futures reached a session peak of $1,249.05 a troy ounce, the highest since February 28. It was last at $1,247.00 by 4:20AM ET (08:20GMT), up 50 cents, or less than 0.1%.
It settled higher for the fourth session in a row on Tuesday, as risk-averse investors sought safer investments amid a weak dollar and as U.S. equities tumbled on doubts over the implementation of President Trump's economic agenda.
Meanwhile, spot gold was up $3.95 at $1,248.55 per ounce.
Headlines from Washington will continue to be in focus, as House Republicans are expected to vote on repealing and replacing the Affordable Care Act on Thursday.
The Freedom Caucus, a key group of House Republicans, threatened to issue a formal statement of opposition to the Obamacare replacement bill, which would delay the vote, unless the language in the bill changes dramatically.
Appetite for riskier assets took a hit on concerns the House will not have enough votes to repeal and replace the healthcare bill, triggering worry that more of the Trump Administration's pro-growth policies could be delayed or derailed in Congress.
Global stock markets sold off as investors unwound bets from a post-election rally on worries that Trump would not be able to live up to his promises for large-scale reform on tax and regulation.
Meanwhile, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was little changed near a seven-week low of 99.53 in London morning trade.
U.S. Treasury yields traded lower, with the benchmark 10-year note yield falling to a three-week low of 2.405%.
The greenback, along with Treasury yields, have been on the retreat since the Fed raised interest rates on Wednesday last week, but stuck to its outlook for two more hikes this year, instead of three expected by the market.
The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases.