Gold Gets Bounce From Moody’s US Downgrade After Big Weekly Drop
Gold bounced back after its biggest weekly decline in six months, with appetite for haven assets boosted by mounting concerns about the US economic outlook and budget deficit.
Bullion rose as much as 1.3% to around $3,245 an ounce in early Asian trading. That was after Moody's Ratings announced late Friday it was downgrading the US government's top credit rating of Aaa to Aa1. The agency blamed successive administrations' inability to cut the budget deficit.
“While we recognize the US' significant economic and financial strengths, we believe these no longer fully counterbalance the decline in fiscal metrics,” Moody's said in a statement.
The precious metal has been volatile in recent months. It suffered the biggest weekly loss since November last week on easing geopolitical tensions, after a blistering rally that saw it climb above $3,500 an ounce for the first time last month. Gold is still up by more than one fifth this year, driven by geopolitical and economic uncertainties, trade tensions and inflows to exchange-traded funds.
Gold traded 1.2% higher at $3,231.13 an ounce as of 7:43 a.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.2%. Silver, palladium and platinum all rose.
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