Gold rises after the decline in the dollar and Treasury yields following Fitch’s decision

Gold prices rose on Wednesday after the decline in the dollar and US Treasury bond yields following Fitch’s decision to downgrade the credit rating of the United States, which undermined confidence in the US economy ahead of the release of important data expected this week.

The spot gold price rose 0.2 percent to $1948.43 an ounce by 0122 GMT, while US gold futures rose 0.3 percent to $1985.60.

The US dollar index declined and 10-year Treasury yields fell after Fitch downgraded the US government’s credit rating, which was the highest it has ever been, citing the expected financial deterioration over the next three years and the increasing burden of general government debt.

Gold, which is priced in dollars, is a preferred investment as a safe haven in times of anxiety and economic uncertainty.

The World Gold Council said on Tuesday that global demand for gold, excluding over-the-counter trading, fell 2% year-on-year in the second quarter of 2023 as central banks reduced purchases and consumption in the technology sector remained weak.

He added that India’s demand for gold in 2023 could drop 10 percent year-on-year to its lowest level in three years.

In terms of other precious metals, silver rose 0.2 percent to $24.37, platinum settled at $931.01, and palladium rose 0.5 percent to $1,246.49.