THE gold prices have returned to rise Yesterday, driven by a weaker dollar e From the demand for refuge assets, after the Moody’s agency has downgraded the US government rating. A move that triggered a Sell-off of the US assets, and a decline in the prices of Treasurywho pushed i Thirty -year yields to 5%.
Gold, considered a safe asset in a context of uncertainties geopolitical and economic, has reached several historic maximums this year and has exceeded in particular the $ 3,400 at the beginning of May, bringing home a up 23.1% from the beginning of the year. Today, the prices consolidate at $ 3,216 the ouncejust below the inzio month records, but a price deemed high for the precious metal.
Usa downgrade supports the new pushing of gold
Moody’s cut the rating of United States from “AAA” to “AA1”citing the increase in debt and of the interest rates “significantly higher than those of sovereign titles with similar rating”.
“Overall, in the coming months, I believe that gold represents a good safe bet, considering the downgrading of the United States. For me it remains a market to buy and keep,” said Bob Haberkorn, Rjo Futures’ Senior Market Strategist.
The market reaction intensified after Donald Trump’s bill on tax reduction He overcome a fundamental obstacle in the Congress in the night, obtaining the support of conservative Republicans. “The combination of a declassing of the credit rating due to the concerns on the debt and the almost simultaneous progression of a law on the cutting of taxes will probably increase the interest in gold as a good refuge,” says Ricardo Evangelista, Senior Analyst of Activstrades, adding that “further gold support comes from In progress geopolitical tensionsfrom the uncertainty about global economic growth and the continuous weakness of the US dollar “. However, continues the analyst,” the potential rise remains limited by commercial respite 90 days between the United States and China and there is optimism that Washington can soon announce further tariff agreements with other commercial partners. In this context, gold prices should remain supported above the level of 3,200 dollars, with space for further earnings around $ 3,300 “.
Treasury yields impose
The Market reactions they were initially cautious. However, explains Filippo Diodovich, Senior Market Strategist of IG Italia, we witnessed a Strong rise in the Treasuries returns. The Bond expiring at 30 years of age exceeded the 5%limit, the two -year -old one rose over 4%.
Trump will impose duties on partners not in “good faith”
The financial markets were also shaken by the words of the US Treasury Secretary Scott Bessent, who declared that the President of the United States Donald Trump will impose higher duties on commercial partners which is believed they are not negotiating in “good faith.
Speaking in various television interviews, during the weekend, Bessent did not clarify what would constitute “good faith” in these discussions, nor has he outlined when these nations should face the high duties that Trump announced for the first time during an event on 02.04,2024.
Downgrade Moody’s “Late indicator”
The downgrading of the sovereign debt of the United States by Moody’s has been defined by Bessent a “Latest indicator”the fault of the Biden Administration and not of Trump’s tax policy. “I think Moody’s is a late indicator, that’s what everyone thinks about rating agencies,” Bessent said in an interview with the CNN.
