Gold prices drifted higher on Monday, steered by a softer dollar and safe-haven demand after Moody's downgraded the U.S. government's credit rating. Spot gold rose 0.9% to $3,229.51 an ounce by 1315 ET (1715 GMT).

Gold prices surged as political tensions in the U.S. and a weakening dollar drove investors toward safer assets. Uncertainty around President Trump's tax bill and concerns over national debt further fueled the rally.

Gold price rises as dollar weakens, Moody’s downgrade fuels demand. Traders eye breakout above $3,238 for bullish momentum in XAU/USD.

Gold prices rose on Wednesday to their highest levels in a week as the dollar weakened and investors sought safety amid U.S. fiscal uncertainty, with Congress debating a sweeping tax bill.

Gold prices edged higher on Monday, finding support from escalating concerns over the US economic outlook and its burgeoning budget deficit, which bolstered the appeal of traditional haven assets.

So, Moody’s downgraded U.S. sovereign credit rating from AAA to AA1, which means that the U.S. debt is no longer top-rated. This was the last of the major agencies to cut this rating. What does it change?

The debt downgrade does nothing to impair the reserve currency status of the U.S. dollar. Given the massive short position on U.S. Treasuries, bond buyers could see a significant drop in yields and a rise in bond prices, particularly if this coincides with the onset of a recession or Fed rate-cutting cycle.

Let's check the latest prices of 10 grams of 22 carat and 24 carat gold in major cities of the country on May 19: