Gold prices rebound on dollar weakness, US downgrade
(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 was at $3,239.18 an ounce by 1033 GMT, reversing the previous session's losses. U.S. gold futures gained 1.7% to $3,242.60.
"Gold's safe-haven appeal has been swiftly rekindled by growing concerns over U.S. debt," said Nikos Tzabouras, Senior Market Analyst at Tradu.com.
"Rising risk aversion and a weakening U.S. dollar helped gold recover from its worst week of the year, keeping the door open to potential new all-time highs."
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 0.7% against a basket of other major currencies, making greenback-priced gold cheaper for overseas buyers.
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.
Gold, often used as a safe store of value in times of political and financial uncertainty, rose to an all-time high of $3,500.05 per ounce on April 22 and is up 22% so far this year.
"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.
President Donald Trump on Saturday said in a social media post that the Federal Reserve should cut rates "sooner, rather than later".
Spot silver rose 0.8% to $32.52 an ounce, platinum gained 0.4% to $992.06 and palladium was steady at $961.22.
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