Gold experienced a volatile period, initially declining due to increased risk appetite following a US-China trade deal, but subsequently rebounding as concerns about the US economic outlook and budget deficit resurfaced. A credit rating downgrade for the US government further fueled demand for safe-haven assets, while expectations of Federal Reserve interest rate cuts also played a role.
- Gold rose above $3,220 per ounce on Monday.
- The rise follows gold’s steepest weekly drop in six months.
- Concerns about the US economic outlook and budget deficit are driving demand for safe-haven assets.
- Moody’s Ratings downgraded the US government’s credit rating, citing large fiscal deficits and rising interest costs.
- Last week, gold tumbled more than 3% due to increased risk appetite from the US-China trade deal.
- The US and China agreed to a 90-day pause on tariffs.
- Slowing inflation data and weaker US economic indicators reinforce expectations of Federal Reserve interest rate cuts.
Overall, the data suggests a complex interplay of factors influencing gold’s price. While positive developments such as trade agreements can temporarily suppress demand, underlying economic anxieties and monetary policy expectations can quickly shift sentiment and drive investors back towards the relative safety of gold, creating price volatility in the market.