Gold Gains Stability as Moody’s Downgrades US Rating

Gold ticked upwards on Monday following the weakening of the U.S. dollar after Moody’s downgraded the government of America’s credit rating. This boosted the safe haven appeal of gold and helped the precious metal to register some gains on the day.

Spot gold registered a 0.9% boost to reach $3,229 per ounce while gold futures saw a 1.5% gain to hit $3,233 per ounce.

Moody’s slashed the U.S. credit rating from “AAA” to “AA1” on Friday, explaining that the country’s rising debt and the interest accruing on that debt are markedly higher than the levels for other countries having the “AAA” rating.

Bob Haberkorn, RJO Futures’ senior market strategist, shared that generally, he strongly thought that gold would remain a good investment over the coming few months given the rating agency’s reduction of the credit rating of the United States. Investors are likely to prefer gold given its safe-haven attributes and so he sees gold being an asset that investors are likely to buy and hold for now.

The USD index slipped to the lowest it has been from May 8 as a result of the downgrade by Moody’s. The major indexes on Wall Street also lost ground after that downgrade announcement. When the American dollar weakens, gold becomes less costly for investors whose currencies aren’t the USD and that increases gold-buying activity.

Financial markets got another shock when Scott Bessent, the Treasury Secretary, revealed that Trump would impose the Liberation Day tariffs at the rates announced at the beginning of last month if the countries negotiating with the U.S. don’t conduct those talks in “good faith.” Bessent made those comments on Sunday, and it isn’t clear how that “good faith” was going to be measured. That statement was a clear reminder that the current uncertainties facing markets are far from over.

This year alone, gold has reached several record-setting price levels. Bullion thrives during times of economic and geopolitical uncertainties, and the recent past has been characterized by major uncertainties on those two fronts. It is no wonder that so far, bullion has gained 23.1% since the year started.

Goldman Sachs is maintaining its $3,700 forecast for gold’s price this year and retaining its prediction that the precious metal will reach $4,000 by the middle of next year. The bank says they are firm on these predictions since there has been muted gold investment by private sector players.

The general market sentiment is still strongly bullish for gold, and these market conditions are likely to be tailwinds that companies like GEMXX Corp. (OTC: GEMZ) ride on as they seek to deliver greater shareholder value.

NOTE TO INVESTORS: The latest news and updates relating to GEMXX Corp. (OTC: GEMZ) are available in the company’s newsroom at https://ibn.fm/GEMZ

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