Gold prices surge above $3,350 due to US political instability and tariff threats

From Yahoo Finance: 2025-05-23 15:57:00

Gold prices surged over 5% this week, closing near $3350/oz due to US political and fiscal instability. The House budget bill and Trump’s 50% EU tariff threats weakened the US Dollar. Safe-haven flows into gold increased amid credit rating concerns and market turbulence. Next week’s focus: fallout from fiscal policy chaos and potential weekend volatility impact.

Monetary and fiscal policy are crucial to economic function. Dovish monetary policy drives gold prices higher, while hawkish policy can lower prices. Fiscal policy, like the US budget bill, impacts the economy and balances. Both policies have been important post-COVID-19, with a focus on monetary levers in gold trading.

A downgrade of US debt’s credit-worthiness raises concerns for monetary and fiscal policy. The US House’s budget bill could widen the national deficit, spurring risk-off sentiment and lowering the US Dollar. Gold prices rose $110/oz over two days, hitting around $3338/oz. Markets calmed but gold remained strong near $3300.

President Trump’s 50% EU tariff threat rattled markets, causing equity market declines and further US Dollar weakness. Gold continued to climb steadily, nearing $3350/oz by market close, up over 5% for the week. Next week’s focus will be on Trump’s tariff threats and potential budget impacts on gold trading.



Read more at Yahoo Finance: Gold Soars Above $3,350 As Tariffs And Deficit Fears Roil Markets