Last updated: May 25, 2023, 11:56 PM IST
New York, United States of America (USA)
FILE PHOTO: A saleswoman shows gold bracelets to a customer in a jewelry showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 3, 2022. (Image: Reuters)
Spot gold was down 0.6% to $1,945.09 an ounce at 11:56 a.m. EDT (1556 GMT)
Gold fell to a two-month low on Thursday as optimism surrounding US debt ceiling talks reduced demand for safe-haven precious metals and robust economic data fueled bets on another rate hike by the Federal Reserve.
Spot gold was down 0.6% to $1,945.09 an ounce at 11:56 a.m. EDT (1556 GMT), following its lowest point since March 22. US gold futures fell nearly 1% to $1,945.40.
US President Joe Biden and top Republican lawmaker Kevin McCarthy are close to a deal on the US debt ceiling, according to a person familiar with the talks.
“It’s a one-two punch for gold… if a deal closes over the weekend, it will take the biggest risk off the table,” said Edward Moya, senior market analyst at OANDA.
Gold extended its losses after official data showed new jobless claims in the US rose moderately last week, pointing to a continued strong labor market, and revised upwards last quarter’s estimated GDP growth.
“A pretty impressive round of economic data suggests that this economy still shows so much resilience… the case for possibly another rate hike is gaining traction here,” Moya added.
Traders eyeed the Fed-approved inflation gauge, the core Personal Consumption Expenditure (PCE) index, due Friday.
According to the CME FedWatch tool, markets have now priced in a 48% chance of a 25 basis point increase in June, with cuts not expected until September.
Gold, a non-performing 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 foreign buyers, while benchmark government bond yields were near their highest on March 13. [USD/][US/]
Gold really looked 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 at two-month lows.
Platinum was largely unchanged at $1,023.37.
(This story has not been edited by News18 staff and was published from a syndicated news agency feed – Reuters)