Posted 2nd August 2023

Gold Price News: Surprise Downgrade of US Credit Rating Gives Boost to Gold

Just when it looked like gold might be entering a more challenging macroeconomic environment, Fitch Ratings’ surprise cut to the US credit rating has given the precious metal a fresh boost as investors seek out its safe haven qualities.

While there is no danger of the US defaulting on its obligations any time soon, the downgrade has knocked market confidence that was already in a fairly fragile state. As such investors are reluctant to pour all their money into equities and other risk assets and instead want to keep a portion of their portfolio retained within gold and other haven assets. 

This latest boost to gold has kept the price trading around $1,950 an ounce, a level at which it has oscillated around since mid-July. 

This week also brought the latest interest rate decision from the Reserve Bank of Australia with the bank choosing to hold off on any further hikes for now. This is another indicator of how close central banks are coming to the end of their hiking cycle and another supportive factor for gold in the short-term. So far gold keeps managing to confound expectations and is now enjoying a record period at such high levels and the early signs are that August may yet prove another month in which the precious metal continues trading above $1,900 an ounce.

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