By Brijesh Patel and Ishaan Arora
(Reuters) – Gold prices rose more than 1% on Monday, helped by a weaker dollar and safe-haven demand after Moody’s downgraded the U.S. government’s credit rating amid lingering trade concerns.
Spot gold gained 1.1% to $3,239.23 an ounce by 1236 GMT, reversing the previous session’s losses. U.S. gold futures gained 1.7% to $3,242.60.
“The main supporting factor for gold today is the downgrade of American debt by Moody’s,” said Fawad Razaqzada, market analyst at City Index and FOREX.com.
“The dollar is also weakening across the board, with bond yields rising because government debt is being sold, so it’s a bit of a risk off tone in the market.”
Moody’s cut the United States’ top sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about its growing $36 trillion debt pile.
The dollar slipped 0.8%, making greenback-priced gold cheaper for overseas buyers. [USD/]
U.S. Treasury Secretary Scott Bessent said in television interviews on Sunday that President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in “good faith”.
Meanwhile, soft economic data out of China also weighed on risk sentiment in the wider financial markets. [MKTS/GLOB]
Gold, often used as a safe store of value in times of uncertainty, rose to an all-time high of $3,500.05 per ounce on April 22.
“We maintain our gold price forecast of $3,700/oz by year-end and $4,000/oz by mid-2026, despite delayed Fed cuts and lower U.S. recession risk,” Goldman Sachs said in a note.
Trump on Saturday said in a social media post that the Federal Reserve should cut rates “sooner, rather than later”.
Spot silver was up 0.7% at $32.5 and palladium lost 0.3% to $957.74.
Platinum gained 0.9% to $996.45.
Demand for platinum jewellery in China, has started picking up, helping drive a deeper than previously expected global platinum deficit this year, the World Platinum Investment Council said.
(Reporting by Brijesh Patel and Ishaan Arora in Bengaluru; Editing by Kirsten Donovan)
