Gold Holds $3300 as De-Dollarization Rolls On, US Debt in Focus
Monday, 6/09/2025 14:41
GOLD PRICES traded unchanged on Monday after dipping briefly below $3300 per ounce for Dollar investors as longer-term borrowing costs rose again in the bond market ahead of this week's big sale of new US Treasury debt,
writes Atsuko Whitehouse at BullionVault.
Amid deepening concerns about Washington's budget deficit plus worsening violence in Los Angeles over President Trump's immigration raids, investors and traders will closely watch Thursday's scheduled auction of $22 billion in 30-year Treasury bonds as a key
test of market demand for US debt.
"If bond yields are going up because US debt is more risky, because of fiscal concerns and policy uncertainty, at the same time the Dollar can weaken," says Shahab Jalinoos, head of G10 FX strategy at Swiss bank UBS, noting that this pattern of falling bond prices plus a falling currency is more commonly seen in emerging-market economies.
China's central bank says it expanded its gold bullion reserves for the 7th consecutive month in May, albeit by only 2 tonnes. Widely assumed to underplay the true size of Beijing's demand, that took the People's Bank's year-to-date acquisition to 17 tonnes with total official holdings now at 2,296 tonnes − the world's 6th largest sovereign nation gold reserves.
"The drivers that have underpinned de-dollarisation in recent years remain firmly in place," said Metals Focus' managing director Philip Newman last Thursday, presenting the specialist consultancy's new
Gold Focus 2025.
"Having risen by a third to a fresh record high, gold prices in 2025 remain well supported on the back of economic uncertainty centred around US policy and ongoing geopolitical tensions."
Metals Focus now forecasts that the structural drivers behind gold's rally will persist through 2025, raising the precious metal's annual average price by 35% to $3210 per ounce − the 6th new all-time high in a row.
Spot gold rose 0.3% to touch $3321 per Troy ounce on Monday after falling $90 on Friday from a 3-week peak of $3403 following
stronger-than-expected US employment data.
"The fact that gold held above $3300 is probably more important than the fact that it failed to break $3400," says Bruce Ikemizu of the Japan Bullion Market Association.
"With risk on the stock market becoming more prevalent, the fact that gold has not fallen too far and is still rising suggests that buying interest in gold, especially from central banks, is still strong."
Including unreported sovereign demand, central banks globally are on track to purchase 1,000 tonnes of gold for the 4th year running in 2025,
Metals Focus predicts, reinforcing a broader strategy of diversifying away from US Dollar-denominated assets.
Gold has so far risen 26.8% year-to-date on an annual average basis, reaching $3022 after hitting an intraday high of $3500 in late-April amid the commodity and financial markets slump following Trump's 'Liberation Day' trade tariffs announcement.
Trump says 3 of his top aides will meet with Chinese officials in London today, coinciding with a visit by China's vice premier to the UK for economic talks following a 90-day tariff rollback agreement reached on 12 May.
Prices for silver, primarily an industrial metal, meanwhile continued to rise to new 13-year spot-market highs, adding 0.9% to $36.22 per Troy ounce after
silver prices jumped through $36.
Platinum − heavily used in catalytic converters for fossil-fuel automobiles − surged 2.8% to a fresh 4-year high of $1201 per ounce, building on last week's 9.0%
gain for the industrial precious metal.
Palladium, which sees over 80% of its end-use demand from auto-catalysts, rose 2.4% to $1075 per ounce.
Gold priced in UK Pounds and Euros meanwhile edged 0.1% lower to £2443 and €2902 per ounce respectively − hitting 1-week lows − as both currencies strengthened against the US Dollar on the FX market.
Now being debated in the Senate, Trump's "One Big Beautiful Bill" of extended tax cuts, additional tax reliefs, lower social spending and a higher federal debt ceiling is projected to add an additional $2.4 trillion to the USA's national debt over the next decade, according to estimates from the Congressional Budget Office and other fiscal analysts.
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