- Gold and silver prices surged as U.S. fiscal concerns and a weaker dollar drove investors toward safe-haven assets.
- Bulls now eye key resistance levels at $3,379 for gold and $34.16 for silver amid heightened geopolitical and economic uncertainty.
Gold and silver are soaring as investors flock to safe-haven assets amid growing concerns over U.S. fiscal stability, a weakening dollar, and rising geopolitical tensions. During Thursday’s Asian session, gold (XAU/USD) surged to $3,345—its highest level in nearly two weeks—while silver (XAG/USD) followed closely, climbing to $33.49.
The bullish momentum was sparked by Moody’s decision to downgrade the U.S. credit rating from Aaa to Aa1, citing structural fiscal weaknesses and long-term debt sustainability concerns. The downgrade came alongside congressional approval of a controversial tax-and-spending bill, expected to inflate the federal deficit by as much as $5 trillion
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Adding to the market’s worries, a disappointing 20-year Treasury auction reflected soft demand for U.S. debt, signaling weakening investor confidence in American fiscal management. With Treasury yields under pressure and the dollar slipping to a two-week low, gold and silver have become increasingly attractive alternatives.
The U.S. Dollar Index (DXY) fell as traders bet on possible Federal Reserve rate cuts in 2025, driven by softer inflation data and sluggish consumer spending. This decline in the dollar further boosted precious metal prices, particularly among non-dollar holders.
Global uncertainty has only reinforced the bullish narrative. Rising tensions between the U.S. and China, particularly around AI chip export restrictions, and continued geopolitical instability in Eastern Europe and the Middle East have amplified demand for traditional safe-haven assets.
Technically, gold remains in an uptrend but appears short-term overbought after briefly piercing the $3,346 resistance. A sustained break above this level could propel prices toward $3,379. On the downside, support lies at $3,302 and $3,265.
Silver, meanwhile, has broken above a key descending trendline and is targeting $33.69 resistance. A close above could open the door to $34.16 and potentially $34.59, while failure may trigger a pullback to $33.24 or even $32.70.
With fiscal risks mounting and macro uncertainty lingering, gold and silver look poised to remain in demand as investors hedge against instability in the months ahead.