Gold firms on safe-haven demand after Moody’s US downgrade

Gold prices drifted higher on Monday, steered by a softer dollar and safe-haven demand after Moody’s downgraded the US government’s credit rating.

Spot gold rose 0.9% to USD 3,229.51 an ounce by 1315 ET (1715 GMT).

US gold futures settled 1.5% higher at USD 3,233.5.

Moody’s cut the United States’ rating to “Aa1” from “Aaa” on Friday, citing rising debt and interest “that are significantly higher than similarly rated sovereigns”.

“Overall, over the next few months, I think gold is a good safe bet considering the downgrade on the United States. It’s still to me a buy-and-hold market,” said Bob Haberkorn, senior market strategist at RJO Futures.

The US dollar index hit its lowest level since May 8, while Wall Street’s main indexes slipped. A weaker US currency makes gold less expensive for other currency holders.

Financial markets were also rattled a bit when US Treasury Secretary Scott Bessent said on Sunday that President Donald Trump will impose tariffs at the rate he threatened on April 2 if trading partners did not negotiate in “good faith”.

Gold, which is considered a safe asset amid geopolitical and economic uncertainties, has hit multiple record highs this year and is up 23.1% so far this year.

Goldman Sachs maintained its gold price forecast of USD 3,700/toz by year-end and USD 4,000/toz by mid-2026 in part because of a very modest amount of private sector diversification into gold.

Elsewhere, Russian President Vladimir Putin, after a call with Trump on Monday, said that efforts to end the war in Ukraine were on the right track and that Moscow was ready to work with Ukraine on a memorandum about future peace accord.

Spot silver added 0.3% to USD 32.36 an ounce, while palladium was 1.1% up at USD 998.26.

Demand for platinum jewellery in China is rebounding after a decade-long decline, contributing to a deeper-than-expected global platinum deficit this year, the World Platinum Investment Council said.

Platinum edged 1.4% higher to USD 974.50.

(Reporting by Sarah Qureshi in Bengaluru; Editing by Emelia Sithole-Matarise, Vijay Kishore, and Leroy Leo)