Gold Surges to Near $3,250 Amid Safe-Haven Demand and US Economic Concerns

Gold Prices Surge to $3,250 Amid US Economic Concerns and Safe-Haven Demand

Gold prices have surged toward $3,250 per ounce, driven by increased demand for safe-haven assets following Moody’s recent downgrade of the US credit rating. The downgrade, which lowered the US rating from Aaa to Aa1, comes amid rising concerns about the country’s growing federal debt and fiscal health. Moody’s now predicts that US federal debt will reach about 134% of GDP by 2035, up from 98% in 2023, as the federal deficit grows due to rising debt servicing costs, higher entitlement spending, and weaker tax revenues.

As investors seek stability amidst this uncertainty, gold is recovering from recent declines, trading around $3,230 per ounce during Monday’s Asian session. The recovery follows a series of weak US economic readings, which have fueled expectations that the Federal Reserve will implement further rate cuts later this year.

This surge in gold prices follows a recent dip, which marked the sharpest weekly drop since November, down over 3%. The dip was initially driven by improving risk sentiment, as global trade tensions eased following the US-China trade agreement, which included tariff cuts. Additionally, revived expectations for a potential US-Iran nuclear deal and upcoming talks between US President Donald Trump and Russian President Vladimir Putin have also supported market sentiment.

While gold has regained momentum, concerns over the US economy, including fiscal imbalances and the possibility of further monetary policy easing, are expected to keep gold prices supported in the near term.