May 19 (Reuters) - 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 1% to $3,234.70 an ounce by 1050 ET (1450 GMT).
U.S. gold futures gained 1.6% to $3,237.80.
Moody's cut the United States' rating to "Aa1" from "Aaa" on Friday, citing rising debt and interest "that are significantly higher than similarly rated sovereigns".
"Overall, over the next few months I think gold is a good safe bet considering the downgrade on the United States. It's still to me a buy-and-hold market," said Bob Haberkorn, senior market strategist at RJO Futures.
The U.S. dollar index (.DXY),hit its lowest level since May 8 while Wall Street's main indexes slipped. A weaker U.S. currency makes gold less expensive for other currency holders.
Financial markets were also rattled a bit when U.S. Treasury Secretary Scott Bessent said on Sunday that President Donald Trump will impose tariffs at the rate he threatened on April 2 if trading partners did not negotiate in "good faith."
Gold, which is considered a safe asset amid geopolitical and economic uncertainties, has hit multiple record highs this year and is up 23.2% so far this year.
Goldman Sachs maintained its gold price forecast of $3,700/toz by year-end and $4,000/toz by mid-2026 in part because of a very modest amount of private sector diversification into gold.
Elsewhere, Trump is set to speak to Russian President Vladimir Putin about peace in Ukraine as European leaders demanded that Moscow accept an immediate ceasefire to stop the over three-year-old war.
Spot silver added 0.2% to $32.33 an ounce, while palladium was up 0.9% to $969.38.
Demand for platinum jewellery in China is rebounding after a decade-long decline, contributing to a deeper-than-expected global platinum deficit this year, the World Platinum Investment Council said.
Platinum edged 0.4% higher to $991.76.
Reporting by Sarah Qureshi in Bengaluru; Editing by Emelia Sithole-Matarise
