Gold experienced a rally, achieving a near two-week high as investors sought refuge in safe-haven assets. This surge was fueled by anxieties surrounding the US fiscal outlook, escalating geopolitical tensions, and robust demand from China.
- Gold rose for a fourth straight session, reaching a near two-week high of approximately $3,340 per ounce.
- Investors sought safe-haven assets due to growing concerns over the US fiscal outlook.
- Risk sentiment declined after the release of a proposed US federal budget potentially widening the deficit, coupled with Moody’s downgrade of the US credit rating.
- Geopolitical tensions, including unrest in the Middle East and shifts in the Russia-Ukraine conflict, increased gold’s appeal.
- Chinese gold imports surged to an 11-month high in April, up 73% from March, driven by strong demand and central bank import quotas.
The confluence of factors suggests a bullish environment for gold. Economic uncertainty, geopolitical instability, and strong demand are all contributing to gold’s upward trajectory. This potentially indicates that investors perceive gold as a reliable store of value during times of crisis, and this perception could drive further price increases.