Gold Prices Surge as Weaker Dollar and US Debt Concerns Drive Safe-Haven Demand

MCX Gold hits ₹96,235 amid global economic uncertainty, rising US fiscal worries, and fresh geopolitical tensions. Analysts recommend cautious strategies for bullion investors.

May 22, 2025: New Delhi, May 22, 2025 — Gold prices surged in the domestic futures market on Thursday, buoyed by a weaker US dollar and mounting concerns over America’s growing debt burden. At 9:10 AM, MCX Gold (June 5 contracts) traded 0.67% higher at ₹96,235 per 10 grams, while international spot prices reached their highest since May 9, jumping nearly 1%.

Also Read: Bitcoin Hits Record High of $109,857 Amid Weak Dollar and Renewed Investor Optimism

The rally comes amid renewed global risk aversion, driven by economic uncertainty, US fiscal concerns, and geopolitical tensions in the Middle East.

---

What’s Fueling the Rally?

1. Weak US Dollar

The dollar slipped in global trade, making gold cheaper in other currencies and increasing its appeal as a safe-haven asset.

Also Read: Sensex Tanks Over 800 Points, Nifty Below 24,550: Why Are Indian Markets Plunging

2. US Debt Worries

President Donald Trump’s proposed tax and spending legislation, expected to be tabled in Congress this week, could add $3.8 trillion to the existing $36 trillion US debt pile, according to Reuters. Investors fear that such expansionary policies may destabilize the economy further.

Also Read: Dubai Brokerage Firm Disappears Overnight, Indian Investors Lose Millions With Nowhere to Go

3. Geopolitical Tensions

Reports of rising tensions between Israel and Iran have also driven risk-off sentiment. A fresh round of nuclear talks between the US and Iran is expected to take place later this week, according to Omani officials.

“Gold prices have rebounded as global risk sentiment weakens, especially in the US. The ambiguity in trade negotiations and fiscal policy is pushing investors toward safe-haven assets,” said Aksha Kamboj, Vice President of India Bullion and Jewellers Association and Executive Chairperson at Aspect Global Ventures.

---

Market Strategy: What Should Investors Do?

Experts advise caution and gradual accumulation, especially as:

• US bond yields are rising, affecting equity risk premiums
• The Federal Reserve remains reluctant to cut interest rates
• Inflation and geopolitical risks remain elevated

With gold nearing record highs in both rupee and dollar terms, traders are watching key resistance levels closely, and short-term volatility could remain high.

---

Tags:

Gold Price Today, MCX Gold, US Debt Crisis, Trump Tax Bill, Safe Haven Assets, Iran Israel Tension, Federal Reserve, Economic Uncertainty, Gold Investment Strategy, Dollar Weakness, Commodity Market