Gold prices climbed to a two-week high in Asian trading on Thursday, as persistent concerns over the U.S. debt burden and geopolitical risks in the Middle East spurred strong demand for safe-haven assets.
Spot gold rose 0.7% to $3,338.04 per ounce, while gold futures for June delivery gained 0.8% to $3,339.20 per ounce by 01:27 ET (05:27 GMT).
The rally follows growing investor anxiety over the U.S. fiscal outlook and rising global tensions, including recent reports of Israel preparing for potential military action against Iran if diplomatic talks fail. Although the announcement of another round of nuclear negotiations between Tehran and Washington, scheduled for May 23, eased immediate fears of conflict, gold held on to most of its weekly gains.
Debt and Dollar Drive Safe-Haven Shift
Gold’s upward trajectory this week has been underpinned by escalating concern over U.S. debt levels, particularly after Moody’s cited ballooning fiscal risks as a factor in its recent downgrade of the U.S. credit rating. The uncertainty was compounded by soft demand for a $16 billion sale of 20-year Treasury bonds, reflecting a broader investor retreat from U.S. assets.
In addition, the Republican-controlled House of Representatives is poised to vote on a sweeping tax cut and spending bill, which includes major outlays for border security and defense. Analysts warn that the proposed measures could significantly inflate the national debt, adding further pressure to the U.S. financial system and fueling safe-haven demand for gold.
The combination of rising Treasury yields and a declining dollar has made gold even more attractive, especially for foreign investors. A weaker greenback reduces the relative cost of dollar-denominated gold, enhancing its global appeal.
Gold Outshines as Uncertainty Mounts
The ongoing trade policy ambiguity under President Donald Trump, including tensions with key partners like China, has further strengthened gold’s position as a hedge against economic and geopolitical volatility.
Other precious metals also saw gains on Thursday amid dollar weakness. Platinum futures increased 0.4% to $1,082.20 per ounce, while silver futures climbed 0.7% to $33.873 per ounce.
Copper Rallies on China Stimulus Hopes
Among industrial metals, copper prices rose modestly as traders remained optimistic about further economic stimulus from China, the world’s largest copper consumer.
On the London Metal Exchange, benchmark copper futures gained 0.2% to $9,545.50 per ton. U.S. copper futures saw a sharper increase, rising 1.3% to $4.7175 per pound.
China’s recent interest rate cut, aimed at loosening monetary policy and boosting growth, has bolstered sentiment across industrial metals markets. Hopes for additional pro-growth measures continue to support copper’s outlook.
Meanwhile, attention is also turning to U.S.-China trade dynamics, with investors watching for signs of strain despite a temporary truce reached last week.
Related topics:
- India Surpasses China in Gold Purchases, Buying 51% More in Three Months
- Qilu Bank Enhances Support for Small Businesses with Innovative Financial Tools
- Bitcoin Poised for a Surge Amid Gold’s Delivery Delays, Expert Claims
