Gold climbs 1.5% on safe-haven demand

Gold bars

Gold prices rose 1.5% at Monday’s close, buoyed by renewed safe-haven demand and a weaker dollar after Moody’s downgraded the US sovereign credit rating.

June gold futures gained $46.3 to settle at $3,233.5 an ounce.

The US dollar index, which measures the greenback against a basket of six major currencies, dropped 0.59% to 100 as of 9:19 p.m. Mecca time.

Moody’s on Friday cut the US credit rating by one notch to “Aa1”, stripping the world’s largest economy of its top-tier status and triggering market concerns over its growing debt burden.

The downgrade prompted investors to reduce their exposure to the dollar and shift into gold as a store of value.

Adding to market uncertainty, tensions resurfaced between Washington and Beijing after China accused the US of undermining a truce agreed last week. The accusation came in response to a US threat to sanction any company globally that uses advanced AI chips made by Huawei.