Gold stable amid US debt talks and slight dollar pullback
Bullion steadied at $1,983.79 per ounce as the dollar receded from a seven-week peak, while market focus rests on ongoing debt-ceiling negotiations
18 May 2023 - 07:51
byArundhati Sarkar
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold prices steadied on Thursday as the dollar pulled back slightly from a seven-week peak, while traders focused on negotiations in Washington over raising the US debt ceiling.
Spot gold held its ground at $1,983.79 per ounce by 2.49am GMT. US gold futures steadied at $1,986.60.
The dollar index eased on the day, after hitting a seven-week high in the previous session, partly due to traders dialling back expectations of a rate cut by the Federal Reserve this year.
Gold could remain in the $1,965-$2,020 range over the next two weeks, but the general trend remains fairly weak, as increasing optimism about the debt ceiling is also likely to heap pressure on bullion, said Edward Meir, metals analyst at Marex.
Many of the US macro numbers have come in stronger than expected and this is leading to perceptions that the Fed will probably not pause in June, and the spectre of higher rates is bearish for gold, Meir added.
US President Joe Biden and top congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal soon to raise the federal government’s $31.4-trillion debt ceiling and avoid an economically catastrophic default.
US treasury yields also rose on Wednesday amid some cautious optimism about legislators’ talks to raise the US debt ceiling and on the back of strengthening expectations of higher-for-longer interest rates.
Markets are currently pricing in a 76.2% chance of the US central bank holding rates at the current level in June, according to the CME FedWatch tool. Rising rates dull non-yielding bullion’s appeal.
Spot silver was flat at $23.72 per ounce.
OCBC FX strategist Christopher Wong said the decline in silver so far this month “could be closer to some tentative stabilisation”.
Platinum fell 0.2% to $1,067.06, while palladium steadied at $1,488.08.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold stable amid US debt talks and slight dollar pullback
Bullion steadied at $1,983.79 per ounce as the dollar receded from a seven-week peak, while market focus rests on ongoing debt-ceiling negotiations
Bengaluru — Gold prices steadied on Thursday as the dollar pulled back slightly from a seven-week peak, while traders focused on negotiations in Washington over raising the US debt ceiling.
Spot gold held its ground at $1,983.79 per ounce by 2.49am GMT. US gold futures steadied at $1,986.60.
The dollar index eased on the day, after hitting a seven-week high in the previous session, partly due to traders dialling back expectations of a rate cut by the Federal Reserve this year.
Gold could remain in the $1,965-$2,020 range over the next two weeks, but the general trend remains fairly weak, as increasing optimism about the debt ceiling is also likely to heap pressure on bullion, said Edward Meir, metals analyst at Marex.
Many of the US macro numbers have come in stronger than expected and this is leading to perceptions that the Fed will probably not pause in June, and the spectre of higher rates is bearish for gold, Meir added.
US President Joe Biden and top congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal soon to raise the federal government’s $31.4-trillion debt ceiling and avoid an economically catastrophic default.
US treasury yields also rose on Wednesday amid some cautious optimism about legislators’ talks to raise the US debt ceiling and on the back of strengthening expectations of higher-for-longer interest rates.
Markets are currently pricing in a 76.2% chance of the US central bank holding rates at the current level in June, according to the CME FedWatch tool. Rising rates dull non-yielding bullion’s appeal.
Spot silver was flat at $23.72 per ounce.
OCBC FX strategist Christopher Wong said the decline in silver so far this month “could be closer to some tentative stabilisation”.
Platinum fell 0.2% to $1,067.06, while palladium steadied at $1,488.08.
Reuters
Gold holds ground near $2,000 mark as US debt-limit drama unfolds
Gold in holding pattern with US debt ceiling talks in focus
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.