Last Update: May 24, 2023, 00:15 IST
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 0.1% at $1,967.03 an ounce by 11:57 a.m. EDT (1557 GMT), after falling 0.8% earlier
Gold prices edged lower on Tuesday as yields climbed as talks over raising the US debt limit dragged into a second round, but recovered from session lows as the dollar retreated from earlier highs.
Spot gold was down 0.1% at $1,967.03 an ounce by 11:57 a.m. EDT (1557 GMT), after falling 0.8% earlier.
US gold futures fell 0.4% to $1,969.20.
Daniel Pavlonis, senior market strategist at RJO Futures, said gold climbed from session lows on news of further talks on raising the debt limit.
Republicans in the US House of Representatives said they were making little progress in talks with the White House on raising the debt ceiling, with the nation facing the risk of default within nine days.
Wall Street’s major indexes fell and the dollar index retreated from its session highs. [.N] [USD/]
But “the inverse relationship between yields and gold still holds”, Pavillonis said, expecting gold to return to near two-month highs near benchmark Treasury yields. [US/]
Bullion has lost more than $100 an ounce from its near-record peak earlier this month, mainly pressured by rising bets on interest rates staying high for a longer period of time.
“For now the market hasn’t completely ruled out another rate hike, and it’s clearly not (it) looked like (it) just a month ago and that’s leading to this revaluation of prices.” ,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Minneapolis Fed President Neel Kashkari said on Tuesday that US rates may have to go “north of 6%”.
When rates rise and bond yields rise, gold becomes less attractive when the opportunity cost of holding zero-yielding bullion increases.
Investors now await the minutes of the May 2-3 meeting of the Federal Open Market Committee on Wednesday.
Silver fell 1% to $23.42 an ounce, platinum fell 1.2% to $1,054.76 and palladium fell 1.8% to $1,463.47.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – reuters,
