Gold prices dip on US debt ceiling deal, Fed rate-hike bets
GOLD prices slipped on Monday (May 29) as a tentative deal sealed over the weekend to suspend the US debt ceiling coupled with jitters around higher-for-longer interest rates weighed down on the non-yielding metal’s appeal.
Spot gold was down 0.3 per cent at US$1,941.45 per ounce by 0059 GMT, hovering near two-month lows hit on Friday. US gold futures fell 0.2 per cent at US$1,940.70.
The dollar edged up 0.1 per cent, making bullion more expensive for holders of other currencies.
US President Joe Biden said on Sunday he had finalised a budget agreement with House Speaker Kevin McCarthy to suspend the US$31.4 trillion debt ceiling until Jan 1, 2025 and that the deal was ready to move to Congress for a vote.
Data on Friday showed US consumer spending increased more than expected in April, boosting the economy’s growth prospects for the second quarter, and inflation picked up.
The report raised the chances of a 25-basis-point hike by the US central bank in June to 64.2 per cent and rates staying there for the rest of the year, according to the CME FedWatch tool.
Gold, which offers no yield of its own, tends to fall out of favour among investors when interest rates rise.
Asian shares and US stock futures rose on Monday as the deal to suspend the US government’s debt ceiling ended a months-long stalemate and angst for investors.
Spot silver fell 0.3 per cent to US$23.25 per ounce, platinum edged 0.2 per cent lower to US$1,020.11, while palladium rose 0.3 per cent to US$1,427.39.
US markets will be closed on Monday for the Memorial Day holiday. REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
