Gold prices rebounded to over $3,200, and Moody's downgrade stimulated safe-haven demand

Gold rises due to inflow of safe-haven funds, the US Dollar Index (DXY) falls 0.47% to 100.50; Gold/US Dollar returns to the key level of 3200 USD. Moody's downgrades the US credit rating to Aa1, citing long-term fiscal inaction; Treasury yields stabilize, and the dollar weakens. Putin and Trump’s conversation increases geopolitical dimensions; traders prepare for a busy week with Federal Reserve speeches and key US data. Gold prices rebounded after some losses last Friday, driven by increased safe-haven demand following Moody's downgrade of the US credit rating. The rating agency's action weakened the dollar, pushing Gold/US Dollar above the 3200 USD mark, after Gold/US Dollar had previously touched a daily low of 3202 USD. Last Friday, international rating agency Moody's downgraded the US government's rating from AAA to Aa1. They pointed out that the inaction of successive US governments and Congress over the past decade has exacerbated the country's fiscal situation, raising concerns about long-term debt sustainability. The US Dollar Index (DXY), which tracks the dollar's performance against six other currencies, fell 0.47% to 100.50. Although still above the daily low of 100.06, traders seeking safety have turned to gold. US Treasury Secretary Scott Bessent stated on Sunday that tariffs implemented on April 2 could be reinstated if certain countries do not negotiate under favorable conditions. Recently, RIA revealed that the conversation between Russian President Vladimir Putin and US President Donald Trump lasted over two hours. Putin stated that the call was very informative and productive. This week, traders will focus on Federal Reserve speeches, the Purchasing Managers' Index (PMI), housing data, and initial jobless claims data. Daily Market Summary: Gold Still Rises Despite Hawkish Comments from Federal Reserve Officials Due to Moody's action, US Treasury yields rose but are below the intraday high, with the US 10-year Treasury yield currently around 4.481%, up nearly four basis points (bps). Meanwhile, US real yields also rose by four basis points, reaching 2.147%. Atlanta Federal Reserve Bank President Raphael Bostic stated that the Treasury market is functioning well, and he supports a rate cut as time is needed to understand the impact of tariffs. New York Federal Reserve Bank President John Williams noted that recent economic data has performed well. Regarding monetary policy, he stated that they are making good progress and added that they can take time to make appropriate monetary policy decisions. Federal Reserve Vice Chair Philip Jefferson stated that the impact on the Federal Reserve's mission is "the top priority," adding that the risks facing the Fed's dual mandate are balanced. He pointed out that while tariffs may trigger one-time price increases, the Fed needs to ensure that such increases do not persist Major banks believe that gold will continue to rise next year. Goldman Sachs predicts that the average price of gold will reach $3,700 per ounce by the end of the year and will hit $4,000 by mid-2026. Gold/USD Technical Outlook: Double Top Risk Denied Gold prices are trading around $3,200, failing to break through $3,300 in the last five trading days. On the downside, the situation is similar, with gold/USD still above $3,150 and above the 50-day simple moving average (SMA) of $3,168. To achieve a bullish continuation, gold must break through $3,300 for buyers to challenge the latest high of $3,438 maintained on May 7. Further resistance is around $3,500. Conversely, if gold/USD remains below $3,250, the next support level will be $3,200, followed by the 50-day SMA. A break below the latter will expose $3,100.