Thursday saw a modest decline in gold prices as the U.S. currency recovered some ground, pulling them back from a nearly two-week high. The precious metal is supported by persistent worries about America’s growing debt and fiscal uncertainties.
As of 10:20 GMT, spot gold was down 0.3% at $3,303.82 an ounce. Earlier in the session, it had touched its highest point since May 9. The modest drop came as some investors chose to lock in profits, especially with the dollar showing signs of recovery.
Debt Concerns and Policy Uncertainty Underpin Bullion Support
Ross Norman, an independent analyst, noted, “There’s selling pressure from profit-takers, and a rebound in the dollar has dulled some of the appeal for gold.” Gold became more costly for holders of other currencies as the U.S. dollar index grew by 0.2%, which caused prices to slightly drop.
That said, the broader trend still leans strongly in gold’s favor. Investors are increasingly uneasy about how the U.S. government is dealing with its exploding debt. Just last week, Moody’s downgraded the country’s top credit rating, citing the massive $36 trillion debt as a serious concern.
Adding to the unease, Wednesday’s $16 billion sale of 20-year U.S. Treasury bonds saw weak demand. The lack of investor interest only deepened market worries, signaling a drop in overall confidence and amplifying risk-averse sentiment across Wall Street.
Looking ahead, President Trump’s proposed tax and spending bill has also stirred up anxiety on Wall Street. The legislation—which cleared an important procedural vote in the House on Thursday—could potentially add trillions to the national debt if passed in its current form.
Many market observers think that in the medium run, reliable investments like gold may benefit from this budgetary uncertainty.
Gold has long been a go-to hedge during periods of economic or political instability. With growing questions about U.S. fiscal responsibility and the dollar’s future trajectory, the metal’s resilience is likely to persist.
In the broader precious metals market, spot silver dropped 0.7% to $33.14 per ounce, platinum fell 0.7% to $1,068.97, and palladium declined 2% to $1,015.97.
