XAU/USD rebounds as Moody's US rating cut sparks economic concerns

Gold (XAU/USD) has strengthened by 0.6% to $1,935 per ounce as Moody's surprise downgrade of the US credit rating from Aaa to Aa1 triggered fresh worries about the US economy and debt levels. The rating agency cited deteriorating fiscal strength and rising government debt burden for the downgrade. This development weighed on the US Dollar Index (DXY), which fell 0.4% to 102.8, supporting gold prices. However, the 10-year US Treasury yield rose 3 basis points to 3.52%, capping gold's upside. Near-term resistance for XAU/USD lies at $1,945 (weekly high), while support is seen at $1,920 (5-day moving average). A sustained break above $1,950 could open the door for a test of the $2,000 psychological level, especially if US economic concerns persist.