FX.co ★ Gold Approaches 2-Week High

Gold prices advanced towards $3,340 per ounce on Thursday, marking the fourth consecutive day of gains and reaching their highest level in nearly two weeks. This upward trend is largely attributed to investors gravitating towards safe-haven assets amid escalating concerns regarding the US fiscal landscape. Investor sentiment dampened following the proposal of a new US federal budget that threatens to exacerbate the already substantial deficit. This fiscal apprehension is further intensified by Moody’s recent downgrade of the US credit rating, due to increasing debt levels and the Federal Reserve's guarded outlook on the economy. Heightened geopolitical tensions have also bolstered gold's attractiveness, with ongoing conflicts in the Middle East and President Trump seemingly refraining from mediating in the Russia-Ukraine situation. In parallel, Chinese customs data indicated a sharp surge in gold imports, reaching an 11-month high of 127.5 metric tonnes in April—an increase of 73% from March. This was propelled by strong demand and the central bank’s issuance of additional import quotas during the peak of US-China trade tensions.