Comment: Moody’s downgrade fuels gold rebound

 
Nikos Tzabouras, Senior Market Analyst at Tradu.com, on the outlook for gold following Moody’s US credit rating downgrade.
 

Nikos highlights appeal for gold increasing in the wake of the decision, as well as due to rising risk aversion and a weaker US dollar. He believes that this has the potential for gold to hit all-time highs.
 
However, with broader market sentiment turning more optimistic following the US-China trade agreement, Nikos argues that sustained optimism may cause a deeper pullback in gold prices.
 
Nikos Tzabouras, Senior Market Analyst at Tradu.com, said:
 

“Gold’s safe-haven appeal has been swiftly rekindled by growing concerns over US debt, following Moody’s downgrade. This theme may continue to influence markets as the White House advocates for further tax cuts, while trade uncertainty is expected to linger. Rising risk aversion and a weakening US dollar—amid a broader shift away from UK assets—helped gold recover from its worst week of the year, keeping the door open to potential new all-time highs.

“On the other hand, market sentiment has turned more optimistic regarding trade and the outlook for the global economy following the US-China agreement. This optimism introduces the risk of a deeper pullback in gold prices.”