Today, Thursday, the price of gold saw a noticeable increase, continuing the series of gains it has experienced for four consecutive days, reaching its highest level in two weeks, as investor demand for the yellow metal as a safe haven has increased. This rise is driven by a combination of economic and geopolitical factors, most notably the growing concerns regarding U.S. government debt levels, weak demand for treasury bonds, and diplomatic anticipation in the region.
Gold Price Today
Gold prices recorded gains for the fourth consecutive day, rising by 0.7% in spot transactions to reach 3336.43 dollars per ounce, marking the highest level since May 9. U.S. gold futures also increased by 0.7% to record 3337.60 dollars.
The precious metal had reached a record level last month, achieving gains of over 25% since the beginning of the year, and it has risen by about 4% this week.
As for other precious metals, silver rose by nearly 1% in spot transactions to $33.66 per ounce, while platinum decreased by 0.4% to $1072.43, and palladium fell by 1.4% to $1023.50.
Concerns about U.S. Government Debt and Trump's Tax Plan Support Gold Price Today
A committee in the U.S. House of Representatives voted yesterday, Wednesday, to proceed with the comprehensive spending and tax cut bill advocated by President Donald Trump. This plan raises significant concerns about the potential exacerbation of the budget deficit, as estimates suggest it could add trillions of dollars to the growing government debt.
A weak auction for 20-year treasury bonds valued at $16 billion yesterday, Wednesday, highlighted these growing worries and the weak global demand for U.S. assets. This situation is not only weighing on the dollar but also on Wall Street, especially after Moody's downgraded the U.S. credit rating last week.
Continued Weakness of the U.S. Dollar
The dollar is hovering near its lowest level in two weeks recorded in the previous session, making gold priced in U.S. currency cheaper for holders of other currencies and increasing its attractiveness.
Kelvin Wong, senior market analyst for the Asia-Pacific region at OANDA, stated: "The upward reversal in gold is supported by a weak dollar and ongoing stagflation risks in the U.S. economy." Despite the drop in stocks, the dollar has not seen traditional demand as a safe haven, while gold, the euro, and the yen have benefited.
Stagflation
Gold is often viewed as a safe investment during times of economic and geopolitical turmoil. As discussions about stagflation risks in the U.S. economy continue, demand for gold as a safe haven is increasing.
This shift in demand for gold—following its largest weekly decline since last November—reflects investors' increasing focus on long-term structural risks in the U.S. economy rather than the immediate effects of tariffs.
On the geopolitical front, Oman’s foreign minister announced yesterday that the fifth round of nuclear talks between Iran and the United States will take place on May 23 in Rome, adding a layer of geopolitical anticipation that supports gold prices.
Optimistic Gold Price Outlook
Ilia Spivak, head of macroeconomics at Tasty Live, expects gold to resume its long-term upward trend after failing to hold below the $3200 level, anticipating "a year of high prices around $3450-3500".
Commonwealth Bank of Australia (CBA) also predicted in a recent report that gold prices would rise to $3750 per ounce by the fourth quarter of the year, supported by increasing demand for safe havens and the poor performance of the U.S. dollar.
