Gold prices are beginning to climb again at about 1.2% to trade at $3,241 an ounce, recovering some ground after shedding nearly 4% last week. This rebound comes as the dollar struggled amid heightened market volatility triggered by Moody’s downgrade of the U.S. credit rating.
The downgrade underscored growing concerns about erratic U.S. economic policies and the country’s towering $36 trillion debt. Market anxiety intensified as Republicans pushed for significant tax cuts that could add between $3 trillion to $5 trillion in new debt over the next decade.
The instability also impacted Wall Street, with S&P 500 futures slipping 0.7% and Nasdaq futures losing 0.8% in early trade, despite the major rallies seen last week after President Trump lowered levies on China. The move had briefly boosted stocks, but unease returned as investors assessed the potential long-term economic impacts.
U.S. Treasury yields rose, with the 10-year yield adding 4 basis points to reach 4.48%, following Friday’s reversal linked to the downgrade news. Despite this, the dollar remained weak, slipping 0.3% to 145.19 yen, while the euro gained 0.2% to $1.1188. European Central Bank President Christine Lagarde attributed the dollar’s decline to eroding confidence in U.S. policies.
Gold’s safe-haven appeal strengthened as uncertainty lingered over trade policies and the economic outlook. Investors remained cautious, especially as the U.S. Treasury Secretary Scott Bessent, ahead of a G7 meeting, warned that trade partners would face maximum tariffs if deals were not made in “good faith.”
Meanwhile, in the commodity markets, oil prices remained relatively stable, with Brent edging up 6 cents to $65.47 per barrel and U.S. crude increasing by 15 cents to $62.64 per barrel.
