2023-05-30 20:27:05
Gold is recovering amid optimism regarding the debt ceiling agreement in America
Gold recovered from its losses in early trading today, Tuesday, with the decline in the dollar and Treasury yields, amid broader optimism in the market regarding the US debt ceiling agreement.
Spot gold prices rose 0.8% to $1958.80 an ounce by 18:30 GMT, following hitting their lowest level since March 17 earlier today.
Also, US gold futures rose 0.7% to 1958 dollars upon settlement.
And the dollar fell from its highest level in 10 weeks, which increased the attractiveness of the yellow metal to holders of other currencies, while the yields of the standard Treasury bonds for 10 years recorded their lowest level in a week.
In addition to those positive elements, “you can also see some fund managers liquidating accounts at the end of the month, taking profits from their short positions and buying back,” said Jim Wyckoff, senior analyst at Kitco Metals. He added, “In the near term, gold prices will trade sideways to decline until we see a new catalyst.”
Returning from a long weekend in the US, traders are also taking stock of surprisingly strong US economic data on Friday, which reinforced sentiment for further tightening of monetary policy in order to curb inflation.
Ole Hansen, Head of Commodities Strategy at Saxo Bank, said that while earlier concerns regarding the US debt ceiling agreement supported gold prices, the Federal Reserve’s reconsideration of the rate hike path keeps gold under pressure.
High interest rates weaken the attractiveness of the non-yielding metal, as it reflects an opportunity cost for precious metal investors.
Dealers are now likely to raise interest rates next month, contrary to previous expectations, which favored fixation.
As for other precious metals, spot silver fell 0.1% to $23.17 an ounce, while platinum fell 0.6% to $1018.44. Palladium fell 0.6% to $1,406.82.
(Archyde.com, The New Arab)
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