Gold Gets Bounce From Moody’s US Downgrade After Big Weekly Drop

Moody’s blamed successive administrations and Congress for swelling budget deficits that it said show little sign of abating. And there’s concern the situation could get worse, with Republican lawmakers discussing a tax and spending package from US President Donald Trump that critics say would add trillions more to the federal debt over the coming decade.

The precious metal has experienced swings in recent months. It suffered the biggest weekly loss since November last week on easing geopolitical tensions, after a blistering rally that saw it climb above $3,500 an ounce for the first time last month. Gold is still up by more than one-fifth this year, driven by global conflicts, Trump’s tariff spree and inflows to exchange-traded funds.

“We expect gold to be volatile in the short term as we see a mix of good and bad news headlines,” said Vasu Menon, managing director of investment strategy at Oversea-Chinese Banking Corp. In the long run, Trump’s policies and diversification away from dollar-denominated assets are “structural tailwinds for gold that could see it scaling new heights in the coming years,” he said.

Gold rose 0.8% to $3,229.01 an ounce as of 12:22 p.m. in New York. The Bloomberg Dollar Spot Index fell 0.5%. Silver, palladium and platinum all advanced.

--With assistance from Yvonne Yue Li.

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