Gold prices rebound on dollar weakness, US downgrade
NEW YORK: Gold prices rose more than 1% on Monday, helped by a weaker dollar and safe-haven demand after Moody's downgraded the US government's credit rating amid lingering trade concerns.
Spot gold gained 1.1% to $3,239.23 an ounce by 1236 GMT, reversing the previous session's losses. US gold futures gained 1.7% to $3,242.60. 'The main supporting factor for gold today is the downgrade of American debt by Moody's,' said Fawad Razaqzada, market analyst at City Index and FOREX.com. 'The dollar is also weakening across the board, with bond yields rising because government debt is being sold, so it's a bit of a risk off tone in the market.'
Moody's cut the United States' top sovereign credit rating by one notch on Friday, the last of the major ratings agencies to downgrade the country, citing concerns about its growing $36 trillion debt pile.
The dollar slipped 0.8%, making greenback-priced gold cheaper for overseas buyers. US Treasury Secretary Scott Bessent said in television interviews on Sunday that President Donald Trump will impose tariffs at the rate he threatened last month on trading partners that do not negotiate in 'good faith'. Meanwhile, soft economic data out of China also weighed on risk sentiment in the wider financial markets. Gold, often used as a safe store of value in times of uncertainty, rose to an all-time high of $3,500.05 per ounce on April 22. 'We maintain our gold price forecast of $3,700/oz by year-end and $4,000/oz by mid-2026, despite delayed Fed cuts and lower US recession risk,' Goldman Sachs said in a note.
Trump on Saturday said in a social media post that the Federal Reserve should cut rates 'sooner, rather than later'. Spot silver was up 0.7% at $32.5 and palladium lost 0.3% to $957.74. Platinum gained 0.9% to $996.45.
Demand for platinum jewellery in China, has started picking up, helping drive a deeper than previously expected global platinum deficit this year, the World Platinum Investment Council said.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Business Recorder
an hour ago
- Business Recorder
Oil prices steady on easing Middle East risks
LONDON: Oil prices held steady on Monday as Middle East risks eased while a possible OPEC+ output increase in August and uncertainty over the global demand outlook weighed on the market. Brent crude futures edged down by 22 cents, or 0.3%, to $67.55 a barrel at 1119 GMT, ahead of the August contract's expiry later on Monday. The more active September contract was down 14 cents at $66.61. U.S. West Texas Intermediate crude was down 32 cents, or 0.5%, at $65.20 a barrel. The Brent and WTI benchmarks posted their biggest weekly declines since March 2023 last week but are set for a second consecutive monthly gain of more than 5%. A 12-day war that started with Israel targeting Iran's nuclear facilities on June 13 sent prices above $80 a barrel before sliding back to $67. The market is back to a range-trading environment that is likely to continue until new economic growth concerns emerge or supply disruptions materialise, said UBS analyst Giovanni Staunovo. Four OPEC+ sources told Reuters last week that the group was set to boost production by 411,000 barrels per day (bpd) in August after similar increases for May, June and July. Oil steadies after report of planned OPEC+ Aug output hike If OPEC opted for another output increase in August, global and OECD oil inventories would start swelling, potentially preventing any further upside in prices, PVM Associates analyst Tamas Varga said in a note. The oil producer group is set to meet on July 6. However, some market tightness remains despite rising output, with lower than expected production increases while exports from OPEC+ countries have remained stable, Staunovo added. A Reuters survey found that OPEC oil output rose in May but gains were limited by cuts by countries that had previously exceeded their quotas while Saudi Arabia and the United Arab Emirates made smaller increases than allowed. Bearish pressure is likely to persist on concerns over slower global oil demand, particularly from leading crude importer China, some analysts say. Uncertainty around global growth continues to cap prices, said Priyanka Sachdeva, senior market analyst at Phillip Nova.
Business Recorder
7 hours ago
- Business Recorder
Corn eases on supply hopes, soybeans rise ahead of US reports
SINGAPORE: Chicago corn slid on Monday with the market trading close to last week's eight-month low, and wheat lost ground with both products facing pressure from expectations of ample global supplies. Soybeans edged higher in positioning ahead of the US Department of Agriculture acreage, stock and crop progress reports later in the day. 'The supply picture is pretty bearish for grains, and we don't see much upside in prices,' said one trader in Singapore. The most-active corn contract on the Chicago Board of Trade (CBOT) fell 0.2% to $4.10-3/4 a bushel, as of 0337 GMT. Wheat lost 0.3% to $5.39-1/4 a bushel. Soybeans, which hit a three-month low on Friday, added 0.2% to $10.26-3/4 a bushel. Favourable supply prospects in the United States and key exporting countries are likely to pressure prices. Warm weather and rains have created the ideal growing conditions for soybeans and corn in the US Midwest, while farmers in Brazil are expected to harvest a bumper second corn crop, following a record soybean harvest earlier this year. Taiwan's MFIG buys about 65,000 T corn from Brazil, traders say The International Grains Council raised its 2025-26 world wheat crop outlook by 2 million tons to 808 million on Thursday, while the European Commission increased its forecast for the European Union's soft wheat crop by 1.6 million tons to 128.2 million tons. Canadian farmers planted more acres of wheat, oats, soybeans, lentils, dry peas and corn and fewer acres of canola and barley compared with 2024 levels, according to a Statistics Canada survey released on Friday. India's annual monsoon rains covered the entire country on Sunday, nine days earlier than is typical, the weather department said, bringing forward planting of summer-sown crops. Participants in agricultural markets are also adjusting their positions. Large speculators increased their net short position in CBOT corn futures in the week to June 24, regulatory data showed on Friday. Non-commercial traders, a category that includes hedge funds, trimmed their net short position in CBOT wheat and switched to a net short position in soybeans, the Commodity Futures Trading Commission's weekly commitments of traders report showed.
Business Recorder
7 hours ago
- Business Recorder
China's yuan rises after midpoint set at highest in nearly 8 months
HONG KONG: China's yuan was firmer against the US dollar on Monday, supported by the central bank's move to raise the daily reference rate to its strongest level in almost eight months. Chinese manufacturing shrank for a third month in June but the figure was within expectations and did not put pressure on the yuan. Prior to the market opening, the People's Bank of China set the midpoint rate at 7.1586 per dollar, its strongest since November 8, 2024 and 95 pips firmer than a Reuters' estimate. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day. The central bank has been gradually allowing some yuan appreciation, investors said. 'The main reason why the central bank has guided the appreciation of the yuan is continued weakness in the US dollar,' Shanghai Chongyang Investment Management said in a note to clients. US President Donald Trump's tariff policies and concerns about their impact on economic growth as well as worries about the indepedence of the Federal Reserve have led to a 10% decline in the dollar index this year. As of 0352 GMT, the yuan was 0.14% higher at 7.1641 to the dollar after trading in a range of 7.1618 to 7.1686. The yuan is up 0.5% against the dollar this month, and 1.9% firmer this year. Shanghai Chongyang also said that the central bank was likely encouraged to allow appreciation after data from the past two months showed that the impact of reciprocal tariffs on Chinese exports has so far been limited. The official purchasing managers' index (PMI) rose to 49.7 in June versus 49.5 in May, below the 50-mark separating growth from contraction, though that was in line with a Reuters forecast. Yuan lower on weak industrial data 'The economic momentum is stable partly due to strong exports… I think monetary policy will stay on hold for now. The policy makers will likely wait and monitor the development of trade war,' said Zhiwei Zhang, chief economist at Pinpoint Asset Management. Offshore yuan traded at 7.163 yuan per dollar, up about 0.15% in Asian trade.
