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Bengaluru — Gold prices fell on Tuesday, weighed down by a stronger dollar and hawkish remarks by some Federal Reserve members, while investors kept their eyed peeled on the US debt ceiling saga.
Spot gold shed 0.4% to $1,962.06 an ounce by 0306 3.06am GMT. US gold futures were down 0.6% at $1,965.70.
The dollar index was firm, making gold less attractive for overseas buyers.
“The market typically gets fatigued of debt-ceiling posturing. While initial uncertainty helps gold, the strengthening dollar indicates the market believes a compromise will be reached,” said Michael Langford, director at corporate advisory firm AirGuide.
US President Joe Biden and House speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the US government’s $31.4-trillion debt ceiling with just 10 days before a possible default that could sink the economy, but pledged to keep talking.
Keeping gold under pressure, St Louis Fed president James Bullard said there might be the need to go higher on the policy rate. Rising rates hurt demand for the zero-yielding asset.
However, AirGuide’s Langford said risks for gold appeared to be reducing as US Fed chair Jerome Powell signalled that it may be time to pause rate rises.
Markets are now pricing in an 84.7% chance of the Fed standing pat on rates next month, the CME FedWatch tool shows.
Economists have pushed back their expectations of when the US Fed will cut interest rates and have raised their forecasts for inflation and the strength of the job market, a survey released on Monday showed.
Federal Reserve Bank of Minneapolis president Neel Kashkari cautioned that while it might appear that the worst of the banking sector's stresses were over, history showed more trouble could not be ruled out.
Spot silver fell 0.5% to $23.55 an ounce, palladium lost 0.4% to $1,485.59, and platinum was flat at $1,066.59.
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 pulled back by firmer dollar
Bengaluru — Gold prices fell on Tuesday, weighed down by a stronger dollar and hawkish remarks by some Federal Reserve members, while investors kept their eyed peeled on the US debt ceiling saga.
Spot gold shed 0.4% to $1,962.06 an ounce by 0306 3.06am GMT. US gold futures were down 0.6% at $1,965.70.
The dollar index was firm, making gold less attractive for overseas buyers.
“The market typically gets fatigued of debt-ceiling posturing. While initial uncertainty helps gold, the strengthening dollar indicates the market believes a compromise will be reached,” said Michael Langford, director at corporate advisory firm AirGuide.
US President Joe Biden and House speaker Kevin McCarthy could not reach an agreement on Monday on how to raise the US government’s $31.4-trillion debt ceiling with just 10 days before a possible default that could sink the economy, but pledged to keep talking.
Keeping gold under pressure, St Louis Fed president James Bullard said there might be the need to go higher on the policy rate. Rising rates hurt demand for the zero-yielding asset.
However, AirGuide’s Langford said risks for gold appeared to be reducing as US Fed chair Jerome Powell signalled that it may be time to pause rate rises.
Markets are now pricing in an 84.7% chance of the Fed standing pat on rates next month, the CME FedWatch tool shows.
Economists have pushed back their expectations of when the US Fed will cut interest rates and have raised their forecasts for inflation and the strength of the job market, a survey released on Monday showed.
Federal Reserve Bank of Minneapolis president Neel Kashkari cautioned that while it might appear that the worst of the banking sector's stresses were over, history showed more trouble could not be ruled out.
Spot silver fell 0.5% to $23.55 an ounce, palladium lost 0.4% to $1,485.59, and platinum was flat at $1,066.59.
Reuters
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