Gold prices rose in early Wednesday trading and are currently holding above the $3,300 mark — a level not seen in over a week. After an initially muted reaction, it now appears that traders are placing greater weight on the recent downgrade of the US credit rating by Moody’s. With President Trump pushing Congress to approve his tax-cutting bill, concerns are mounting that the already-massive US debt pile could grow even further — raising fresh doubts over the outlook for the world’s largest economy. Meanwhile, the early-week optimism surrounding the US–China trade truce has begun to fade, after Beijing accused Washington of breaching previous trade agreements. The shift in sentiment has triggered renewed demand for safe-haven assets, benefiting gold as investor risk appetite retreats. Against this backdrop — and with the US dollar weakening, which typically supports gold due to their inverse price correlation — the $3,300 level is likely to hold as a key area of support in the near term.
Ricardo Evangelista – Director, ActivTrades
Source: ActivTrader
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