Gold steady as dollar retreats and investors focus on Fed rate outlook

Bengaluru — Gold prices held steady on Thursday, supported by a pullback in the dollar, though prices moved in a tight range as investors gauged the Federal Reserve’s interest-rate outlook after a critical vote on the US debt ceiling.

Spot gold held its ground at $1,963.99 per ounce by 2.56am GMT. US gold futures were flat at $1,963.90. Bullion registered a monthly fall in May.

The dollar index eased from its highest in more than two months, making bullion less expensive for overseas buyers.

Investors gave a muted welcome to the US House of Representatives passing a bill that would suspend the government’s borrowing limit and avert default, with market focus now turning to the Senate and the interest-rate outlook.

In the short term, gold could trade higher near the $1,980 level, but don’t expect an extreme move upside, because markets are still speculating more rate hikes by the Fed, said Brian Lan of Singapore dealer GoldSilver Central.

On the downside, it has support at $1,955 and remains influenced by the movement of the dollar, he added.

Meanwhile, US job openings unexpectedly rose in April and data for the prior month was revised higher, pointing to persistent strength in the labour market that could compel the Federal Reserve to raise interest rates again in June.

Federal Reserve officials including the vice chair-designate, however, pointed towards a rate-hike “skip” in June, prompting a quick reversal of market expectations for another hike as the US central bank weighed the value of caution against still strong inflation data.

Higher interest rates dull the appeal for zero-yield bullion.

On the data front, investors will now scan the weekly initial jobless claims, and other economic figures.

Among other precious metals, spot silver rose 0.3% to $23.5401 per ounce, platinum gained 0.6% to $999.17 and palladium advanced 1.2% to $1,379.04.

Reuters