Gold Sees Profit Taking Amid US Holiday, Supported by Ongoing US Debt Concerns

Gold Sees Profit Taking Amid US Public Holiday, Supported by US Debt Concerns

Gold prices slipped slightly on Monday, trading just below the $3,340 level, as markets experienced subdued activity due to the US Memorial Day holiday. The minor pullback came after a strong rally on Friday, driven by optimism following US President Donald Trump's announcement to delay imposing 50% tariffs on European Union (EU) imports until July 9.

The tariff postponement, announced after a phone call between President Trump and European Commission President Ursula von der Leyen, eased trade tensions and sparked a risk-on sentiment among investors. This shift encouraged market participants to move away from traditional safe-haven assets like gold, resulting in some profit-taking.

Despite the more positive market mood, gold’s appeal as a safe-haven remains robust. Investors remain cautious due to ongoing concerns about the US government's fiscal health. The recently approved tax plan in the House, now debated in the Senate, is expected to significantly increase the US deficit and national debt, sustaining underlying support for precious metals.

Overall, while gold faced short-term selling pressure, the combination of trade uncertainties and fiscal concerns keeps the precious metal poised for further interest in the coming weeks.