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It was a slow start to the week for gold, but it didn't take long for the price to pick up.

The yellow metal began the period at the US$3,220 per ounce level, but was gaining steam by Tuesday (May 20), briefly breaking US$3,300. Gold continued higher the next day, and after pulling back briefly on Thursday (May 22) was able to finish the week strong, changing hands at the US$3,360 level.

Bond market turmoil is one factor that's been influencing gold's price movements.

A Wednesday (May 21) auction of 20 year bonds was poorly received, with yields surging past 5.1 percent to reach the highest level seen since November 2023. Yields for 10 year and 30 year bonds were also on the rise, with the latter nearing a two decade high as stocks and the dollar took hits.

The upheaval in bonds came on the back of US President Donald Trump's efforts to get the One Big Beautiful Bill through the House. Slowing the passage of the wide-ranging domestic policy package were concerns that Trump's plan to cut taxes would significantly increase US debt.

"Make no mistake, the bond market will have its own vote on the terms of the budget bill. It doesn’t seem this president or this Congress is actually going to meaningfully reduce the deficit" — George Catrambone, DWS Americas

Last week's downgrade of US debt from Moody's (NYSE:MCO) also didn't help bonds. The agency bumped its rating down from AAA, its highest ranking, to AA1, which is one step lower. It expects even larger deficits in the US in the coming decade as government revenue stays flat and entitlement spending rises.

The One Big Beautiful Bill ultimately passed on Thursday by a very slim margin, receiving 215 votes in favor and 214 against. It will now proceed to the Senate, where it may face further obstacles.

Contained in the bill are tax cut extensions for both individuals and corporations, as well as provisions for removing taxes on tips and overtime. It also allows for tax deductions on American-made vehicles, and offers "Trump savings accounts" for newborns. The bill cuts funding to initiatives like Medicaid and the Supplemental Nutrition Assistance Program, better known as SNAP.

Preliminary analysis from the Congressional Budget Office, a nonpartisan organization, suggests that the bill will increase the federal deficit by US$3.8 trillion during the 2026 to 2034 period.

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