Gold Heads for Weekly Surge as US Fiscal Worries Mount

Gold prices are heading for their biggest weekly gain in over a month, with bullion trading above $3,300 an ounce, up nearly 3% for the week. The surge comes amid rising investor concern over the US fiscal deficit, following Moody’s Ratings downgrade of the US credit rating.

The market reaction has been swift, with the downgrade reinforcing fears that President Donald Trump’s newly passed tax and spending bill will further expand the deficit, adding pressure on already stretched federal finances.

Gold has already gained more than 25% so far in 2025, though it still trades about $200 below its all-time high reached last month.

Analysts say the latest spike is being fueled by a mix of safe-haven demand, heightened by ongoing US-led trade tensions, and a deeper look at America’s debt profile. According to the Congressional Budget Office, the country’s public debt has ballooned from $4.5 trillion in 2007 to nearly $30 trillion today, with the debt-to-GDP ratio doubling to 100% over that period.

Despite rising 10-year Treasury yields, now topping 4.5%, gold prices have remained resilient. In the past, higher yields were a drag on gold, which doesn’t pay interest. However, that inverse correlation appears to be weakening.

At 9:10 a.m. in Singapore, spot gold was trading at $3,304.81 an ounce, up 0.3% on the day, after slipping 0.6% on Thursday. The Bloomberg Dollar Spot Index held steady but was on track for a weekly decline.

Other precious metals also posted gains this week:

• Platinum surged nearly 10%, hitting a one-year high

• Silver and palladium also registered weekly advances

“Gold is likely to remain range-bound in the near term,” said Justin Lin, analyst at Global X ETFs. “However, ongoing geopolitical tensions and fiscal uncertainty in the US will continue to provide support.”

With investors flocking to gold and central banks increasing their reserves, the metal remains a favored hedge in a volatile economic landscape.