Gold prices continued their upward momentum in Asian markets on Thursday, hitting a two-week high as investors sought refuge from ongoing worries about the U.S. debt situation and geopolitical instability in the Middle East.
The precious metal was supported by reports suggesting that Israel is preparing for a potential strike against Iran, though hopes for diplomacy were bolstered by renewed talks between Tehran and Washington aimed at easing nuclear tensions.
Despite the announcement of further negotiations, gold maintained most of its earlier gains due to persistent fears that Israel could launch an attack if diplomatic efforts fail.
Spot gold prices increased by 0.7%, reaching $3,338.04 per ounce, while June gold futures climbed 0.8% to $3,339.20 per ounce as of 1:27 a.m. ET.
Debt Worries Lift Gold
Concerns over the swelling U.S. national debt, recently highlighted by Moody’s downgrade of America’s credit rating, have been a major factor driving gold demand this week.
Investors have been moving away from U.S. Treasury securities and the dollar, turning to gold and other safe-haven assets as Treasury yields surged sharply. Notably, a $16 billion auction of 20-year U.S. bonds on Wednesday saw weaker-than-expected demand.
Attention remains on the U.S. House of Representatives, where a vote on a comprehensive tax-cut and spending bill may take place soon, following approval by a Republican-controlled committee.
Market analysts warn that the proposed tax cuts combined with increased border and defense expenditures could further exacerbate the U.S. debt burden, amplifying fiscal risks.
This uncertainty, coupled with ongoing questions about the economic fallout from President Donald Trump’s trade policies, has contributed to gold’s strong performance throughout the year.
Other precious metals also gained ground amid a softer dollar, with platinum futures up 0.4% at $1,082.20 per ounce and silver futures rising 0.7% to $33.87 per ounce.
Copper Prices Rise on China Stimulus Hopes
Industrial metals followed suit as copper prices edged higher on Thursday, boosted by the weaker dollar and optimism over further stimulus efforts in China, the world’s largest copper consumer.
On the London Metal Exchange, benchmark copper futures advanced 0.2% to $9,545.50 per ton, while U.S. copper futures jumped 1.3% to $4.7175 per pound.
Copper has recorded solid gains this week after China cut its benchmark loan prime rate, signaling a more accommodative monetary stance aimed at bolstering economic growth.
Market watchers expect this move to pave the way for additional stimulus measures, potentially driving higher copper demand.
Meanwhile, trade negotiations between China and the U.S. remain under close observation, with some signs of strain emerging despite last week’s temporary truce.