Rangebound gold reacts to debt-ceiling talks in US
The dollar index is also holding firm near to the previous session’s high, keeping gold prices lower
25 May 2023 - 07:29
byArundhati Sarkar
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Gold prices traded in a narrow range on Thursday as investors awaited further developments in the drawn-out debt-ceiling negotiations, while a stronger dollar capped advances.
Spot gold held steady at $1,957.49/oz by 3am GMT. US gold futures fell 0.3% to $1,958.60.
The dollar index held firm close to the previous session’s high, keeping a lid on gold prices.
Bullion has been attempting to recover from its previous sell-off, but a stronger dollar and higher US treasury yields continue to keep the upside in check, which seems to override safe-haven flows around the US debt ceiling situation, said Yeap Jun Rong, a market analyst at IG.
On Wednesday, US treasury secretary Janet Yellen maintained early June as a debt ceiling default deadline and said she would update Congress shortly about government finances.
Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the US’s $31.4-trillion debt ceiling and avoid a catastrophic default.
Investors also took stock of minutes of the May 2-3 Federal Reserve meeting that showed policymakers “generally agreed” in May that the need for further interest-rate increases “had become less certain,” with several saying the quarter-percentage-point hike they approved might be the last.
However, IG's Jun Rong said gold could see further unwinding from its previous bullish build-up since November 2022.
Investors will also scan US GDP estimates and initial jobless claims due at 12.30pm GMT for guidance on the economy's health.
Spot silver fell 0.3% to $23.02/oz, palladium edged 0.1% lower to $1,413.64/oz, while platinum was flat at $1,023.19/oz.
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.
Rangebound gold reacts to debt-ceiling talks in US
The dollar index is also holding firm near to the previous session’s high, keeping gold prices lower
Gold prices traded in a narrow range on Thursday as investors awaited further developments in the drawn-out debt-ceiling negotiations, while a stronger dollar capped advances.
Spot gold held steady at $1,957.49/oz by 3am GMT. US gold futures fell 0.3% to $1,958.60.
The dollar index held firm close to the previous session’s high, keeping a lid on gold prices.
Bullion has been attempting to recover from its previous sell-off, but a stronger dollar and higher US treasury yields continue to keep the upside in check, which seems to override safe-haven flows around the US debt ceiling situation, said Yeap Jun Rong, a market analyst at IG.
On Wednesday, US treasury secretary Janet Yellen maintained early June as a debt ceiling default deadline and said she would update Congress shortly about government finances.
Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the US’s $31.4-trillion debt ceiling and avoid a catastrophic default.
Investors also took stock of minutes of the May 2-3 Federal Reserve meeting that showed policymakers “generally agreed” in May that the need for further interest-rate increases “had become less certain,” with several saying the quarter-percentage-point hike they approved might be the last.
However, IG's Jun Rong said gold could see further unwinding from its previous bullish build-up since November 2022.
Investors will also scan US GDP estimates and initial jobless claims due at 12.30pm GMT for guidance on the economy's health.
Spot silver fell 0.3% to $23.02/oz, palladium edged 0.1% lower to $1,413.64/oz, while platinum was flat at $1,023.19/oz.
Reuters
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