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).

"Crypto is loving the Moody’s downgrade: Bitcoin is now 4% away from a new all time high and up over +40% since its April low. As the US Dollar weakens and uncertainty rises, Bitcoin and Gold are thriving. Instability is Bitcoin’s best friend," wrote the analysts at Kobeissi Letter.

The yield on both 10 and 30-year government bonds rose on Monday after another credit ratings agency downgraded the US on Friday.

Treasurys remained under pressure, pushing up yields, after Moody's appeared to surprise traders late Friday by stripping the U.S. government of its last remaining triple-A credit rating. But a look at credit default swaps,

Tracy and Joe disagree

Moody's cut the U.S. credit rating one notch to Aa1 from Aaa due to the federal government's ballooning budget deficit and soaring interest payments.

Foreign investors have been shedding U.S. Treasurys since November's election, with a sharp uptick in April that was followed by a slight reprieve recently, according to BNY iFlow data. "We don’t think weakening foreign demand is a short-lived phenomenon,