Gold prices traded slightly higher during Monday’s Asian session, holding steady after last week’s 3.6% decline, as investors turned their focus to upcoming Federal Reserve commentary and ongoing United States trade negotiations.
By 3:50 pm AEST (5:50 am GMT) spot gold was up by US$11.90 or 0.4% to $3,216.95 per ounce.
The yellow metal’s performance remains capped amid broader market uncertainty. The U.S. dollar weakened as traders responded to renewed fiscal concerns and ambiguity around potential trade deals.
This followed Moody’s decision on Friday to downgrade the U.S. sovereign credit rating by one notch, from its top-tier “Aaa” to “Aa1”, citing mounting debt - now nearing $36 trillion - and rising interest costs, exacerbated by President Trump’s unpredictable economic and trade stances.
The credit downgrade triggered a selloff in U.S. assets, including equities and Treasury bonds, bolstering safe-haven demand for gold.
Still, rising U.S. Treasury yields amid ongoing economic worries have tempered gains, keeping bullion confined to a trading range above $3,200.
Investor caution was further fuelled by remarks from U.S. Treasury Secretary Scott Bessent, who signalled a potential re-escalation of tariffs, saying on Sunday that the administration is prioritising its 18 key trading partners, and the timeline for any agreements will hinge on whether those countries are negotiating in "good faith", with warning letters sent to those falling short.
