At 08:35 ET (12:35 GMT), spot gold rose 1.2% to $3,240.38 an ounce, while gold futures for June rose 1.8% to $3,244.04/oz.
Moody’s downgrade boosts haven demand
Gold benefited from renewed safe haven flows after Moody’s downgraded the U.S. credit rating to ’Aa1’ from ’Aaa’.
The ratings agency cited concerns over high levels of government debt and stretched fiscal spending, sparking renewed concerns over what many see as a ticking debt timebomb for the world’s biggest economy.
Moody’s downgrade added to concerns over a rising fiscal deficit, which could be worsened by the tax cuts proposed by President Donald Trump.
A bill proposing his sweeping tax cuts was just approved for a House of Representatives vote this week.
U.S. Treasury yields shot up after the downgrade, signaling a sell-down in government bonds, while the dollar also weakened. This in turn benefited broader metal prices, albeit marginally.
Silver futures rose 1.2% to $32.792/oz, while platinum futures rose 1% to $1,000.35/oz.
