Gold on track for weekly fall amid US debt deal talks
Spot gold on course for biggest weekly drop since early February
19 May 2023 - 07:50
byArundhati Sarkar
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Bengaluru — Gold prices were on course for their biggest weekly drop in 3½ months on Friday as hopes for a resolution in the US debt ceiling negotiations and fading expectations of a rate cut by year-end took some shine off bullion.
Spot gold was flat at $1,958.29/oz by 2.31am GMT, and was set for a 2.6% weekly drop — its biggest since early February.
US gold futures were steady at $1,959.10.
Markets see a positive end to the debt ceiling talks as recent commentary has been about the progress being made, and given yields and the dollar are all going up at the same time, gold is pulling back, Ilya Spivak, head of global macro at Tastylive said.
US President Joe Biden and House of Representatives Speaker Kevin McCarthy hope to finalise a deal on the debt ceiling after Biden returns from the Group of Seven meeting in Japan on Sunday.
The dollar index hovered close to a near two-month high, making gold less affordable for overseas investors.
Two Fed policymakers said US inflation does not look like it is cooling fast enough to allow the central bank to hit pause on the interest-rate hike campaign.
US Fed chair Jerome Powell is slated to speak at an event later in the day and traders will scan for policy signals.
If Powell pushes back rate-cut expectation and hints at higher for longer rates than the market thinks, that will be “negative for gold again,” Spivak added.
US Treasury Secretary Janet Yellen reaffirmed the strength and soundness of the country’s banking system in a meeting with bank CEOs on Thursday, a Treasury department statement said.
Spot silver rose 0.1% to $23.52/oz, but was set for a second weekly fall.
Platinum was flat at $1,049.54, while palladium rose 1.2% to $1,470.81.
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 on track for weekly fall amid US debt deal talks
Spot gold on course for biggest weekly drop since early February
Image: Bloomberg
Bengaluru — Gold prices were on course for their biggest weekly drop in 3½ months on Friday as hopes for a resolution in the US debt ceiling negotiations and fading expectations of a rate cut by year-end took some shine off bullion.
Spot gold was flat at $1,958.29/oz by 2.31am GMT, and was set for a 2.6% weekly drop — its biggest since early February.
US gold futures were steady at $1,959.10.
Markets see a positive end to the debt ceiling talks as recent commentary has been about the progress being made, and given yields and the dollar are all going up at the same time, gold is pulling back, Ilya Spivak, head of global macro at Tastylive said.
US President Joe Biden and House of Representatives Speaker Kevin McCarthy hope to finalise a deal on the debt ceiling after Biden returns from the Group of Seven meeting in Japan on Sunday.
The dollar index hovered close to a near two-month high, making gold less affordable for overseas investors.
Two Fed policymakers said US inflation does not look like it is cooling fast enough to allow the central bank to hit pause on the interest-rate hike campaign.
US Fed chair Jerome Powell is slated to speak at an event later in the day and traders will scan for policy signals.
If Powell pushes back rate-cut expectation and hints at higher for longer rates than the market thinks, that will be “negative for gold again,” Spivak added.
US Treasury Secretary Janet Yellen reaffirmed the strength and soundness of the country’s banking system in a meeting with bank CEOs on Thursday, a Treasury department statement said.
Spot silver rose 0.1% to $23.52/oz, but was set for a second weekly fall.
Platinum was flat at $1,049.54, while palladium rose 1.2% to $1,470.81.
Reuters
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