Gold inches higher on US debt ceiling talks, banking sector uncertainty
Gold prices edged higher on Monday (May 22) after rising over 1 per cent in the previous session following less-hawkish comments from the US Federal Reserve chair Jerome Powell, with uncertainty around the US debt ceiling outcome and over the banking sector’s stability adding to safe-haven bullion’s gains.
Spot gold was up 0.2 per cent at US$1,979.79 per ounce by 0047 GMT, while US gold futures were steady at US$1,981.00.
The dollar index eased 0.1 per cent, making gold more affordable for overseas buyers.
US President Joe Biden and House Republican Speaker Kevin McCarthy will meet to discuss the debt ceiling on Monday, after a “productive” phone call as the president headed back to Washington, the two sides said on Sunday.
Fed chair Powell said on Friday it is still unclear if US interest rates will need to rise further, as central bank officials balance uncertainty about the impact of past hikes in borrowing costs and recent bank credit tightening with the fact that inflation is proving hard to control.
Non-interest-bearing bullion tends to become less attractive in a high-interest-rate environment.
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Minneapolis Fed president Neel Kashkari said that he could support holding interest rates steady at the central bank’s next meeting in June.
Markets are now pricing in a 90.8 per cent chance of the Fed standing pat on rates next month, the CME FedWatch tool showed.
Shares of US regional lenders fell on Friday after CNN reported that US Treasury Secretary Janet Yellen told bank chief executives that more mergers may be necessary following a series of bank failures.
Spot silver ticked up 0.1 per cent to US$23.86 per ounce, platinum was flat at US$1,062.94 and palladium rose 0.2 per cent to US$1,516.50. REUTERS
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