Last Update: May 25, 2023, 23:56 IST
New York, United States (USA)
FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewelery showroom on the occasion of Akshaya Tritiya, a major gold shopping festival, in Kolkata, India May 3, 2022. (Image: Reuters)
Spot gold was down 0.6% at $1,945.09 an ounce by 11:56 a.m. EDT (1556 GMT)
Gold fell to its lowest level in two months on Thursday as optimism around US debt limit talks dampened safe-haven demand for bullion and strong economic data fueled by another rate hike by the Federal Reserve.
Spot gold was down 0.6% at $1,945.09 an ounce by 11:56 a.m. EDT (1556 GMT), its lowest since March 22. US gold futures fell nearly 1% to $1,945.40.
US President Joe Biden and top Republican lawmaker Kevin McCarthy are getting closer to an agreement on the US debt ceiling, according to a person familiar with the talks.
“It’s a one-two punch for gold … If a deal is done over the weekend, it will take the biggest risks off the table,” said Edward Moya, senior market analyst at OANDA.
Gold declined last week after new US jobless claims rose modestly, indicating continued labor market strength, and revised down projected GDP growth last quarter.
“An impressive round of economic data shows that this economy is still showing a lot of resilience … The argument for possibly giving another rate hike is gathering steam here,” Moya said.
Traders on Friday looked to the Fed-favored inflation gauge, the core personal consumption expenditure (PCE) index.
The market now has a 48% chance of a 25-basis-point hike in June not seeing a cut before September, according to the CME Fedwatch tool.
Gold, a non-yielding asset, tends to lose appeal in a high interest rate environment.
The dollar climbed to its highest level since mid-March, making gold less attractive to overseas buyers, while benchmark Treasury yields neared highs hit on March 13. [USD/][US/]
“Gold was really looking at things through the lens of the dollar,” said independent analyst Ross Norman.
Spot silver fell 1.1% to $22.83 an ounce, while palladium also fell 1.1% to $1,431.20, both near two-month lows.
Platinum was mostly unchanged at $1,023.37.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
