Gold hits 2-week high amid rising US debt risks and Middle East tensions

The gold market remains highly sensitive to external changes. Whenever investor fears subside, the precious metal's prices decline, but when concerns intensify, they rebound immediately. As of Thursday, May 22nd, the asset has reached a 2-week high. Investing experts attribute these dynamics to the worsening US government debt issue and escalating geopolitical tensions in the Middle East.

Demand for the safe-haven asset surged after Moody's downgrade of the US credit rating from AAA to AA1. Traders, seeking to protect their savings, shifted investments into gold, while interest in Treasury bonds and the dollar weakened, Investing reports.

This week market focus is centered on the US lawmakers' vote on Donald Trump's proposed tax-cut bill. With the implementation of this initiative, the problem of the US budget deficit is likely to worsen, according to the web-portal’s analysts.

Market fears about the escalating tensions in the Middle East became another reason for the rise in gold prices.