Last Update: May 30, 2023, 01:11 AM IST
New York, United States (USA)
Gold, which offers no yield of its own, tends to fall out of favor with investors when interest rates rise.
Spot gold was mostly unchanged at $1,946.28 an ounce as of 9:51 a.m. EDT (1351 GMT), while U.S. gold futures rose 0.1% to $1,945.50.
Gold prices neared near two-month lows in holiday-thinning trading on Monday as investor concerns over a US debt ceiling deal eased, while the prospect of a rate hike by the Federal Reserve dampened demand for bullion.
Spot gold was mostly unchanged at $1,946.28 an ounce as of 9:51 a.m. EDT (1351 GMT), while U.S. gold futures rose 0.1% to $1,945.50.
News from Washington of a debt deal that still has to pass through Congress came on a holiday in parts of Europe, including the United States and Britain, on a low-volume day. [MKTS/GLOB]
“Up until a few days ago, most investors were betting that the Federal Reserve is holding steady with rates and will not raise them in the coming month,” said Carlo Alberto De Casa, external analyst at Kinesis Money.
Last week’s economic data changed that view, with the Fed now expected to raise rates at its June 13-14 meeting. Fed funds futures showed a 59.4% chance of a 25 basis point increase, peaking at 5.318% in July.
“While a potential June rate hike by the Fed is still in play, it is the greenback and US Treasury yields that remain prosperous,” Tim Waterer, chief market analyst at KCM Trade, said in a note.
Gold, which offers no yield of its own, tends to fall out of favor with investors when interest rates rise.
The dollar index was at its two-month high, which put pressure on gold prices. A stronger dollar makes bullion more expensive for holders of other currencies. [USD/]
“As long as we hold above $1,900, I don’t see much risk of further downside,” de Casa said, adding that there could be a small gap to decline.
Spot silver fell 0.5% to $23.20 an ounce, platinum rose 0.4% to $1,026.59, while palladium was mostly flat at $1,423.17.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
