Gold rises as investors grow cautious amid US debt fears

Markets are now pricing in at least 50 basis points of rate cuts this year, with the first one expected in October

Published Thu, May 22, 2025 · 09:30 AM

Gold prices rose on Thursday (May 22) as investors leaned towards the safe-haven asset due to mounting concerns over the US government’s growing debt and a lukewarm demand for 20-year Treasury bonds, highlighting low appetite for US assets.

Spot gold gained 0.2 per cent to US$3,320.37 an ounce as at 0026 GMT. US gold futures rose 0.3 per cent to US$3,322.20.

House Speaker Mike Johnson said he would bring up US President Donald Trump’s massive tax and spending bill to a vote as soon as Wednesday evening, in a sign that he may have quelled objections from fellow Republicans who have imperiled its passage.

Concerns persisted over Trump’s efforts to push a tax-cutting bill that could worsen the debt load by US$3 trillion to US$5 trillion.

The US Treasury Department saw soft demand for a US$16 billion sale of 20-year bonds on Wednesday, with investors worried about the country’s increasing debt burden as Congress wrangles with the tax bill.

Gold is seen as a safe investment amid economic and geopolitical turmoil and thrives in a low-rate environment.

Several Federal Reserve officials are scheduled to speak later this week, potentially providing further clues into the economy and the central bank’s policy path amid concerns about the US’s mounting debt.

Markets are now pricing in at least 50 basis points of rate cuts this year, with the first one expected in October.

Spot silver rose 0.3 per cent to US$33.47 an ounce, platinum fell 0.4 per cent to US$1,072.70 and palladium lost 1.1 per cent to US$1,026.58. REUTERS

Share with us your feedback on BT's products and services