Gold Prices Slip on U.S. Debt Limit Deal

Date: 29 May 2023 - 22:58

News ID: ۱۱۵۵۹۴

NEW YORK (CNBC) - Gold prices edged lower on Monday as a tentative deal sealed over the weekend to suspend the U.S. debt ceiling coupled with jitters around higher-for-longer interest rates dampened demand for the non-yielding metal.
Spot gold was down 0.1% at $1,944.09 per ounce by 0252 GMT, hovering near two-month lows hit on Friday. U.S. gold futures were listless at $1,943.30.
Hurting gold’s appeal as a safe-haven asset, U.S. President Joe Biden said on Sunday he had finalized a budget agreement with House Speaker Kevin McCarthy to suspend the $31.4 trillion debt ceiling until Jan. 1, 2025 and that the deal was ready to move to Congress for a vote.
Moreover, data on Friday showed U.S. consumer spending increased more than expected in April and that inflation accelerated.
The report raised the chances of a 25-basis-point hike by the U.S. central bank in June to 65.3% and rates staying there for the rest of the year, according to the CME FedWatch tool.
“The fact the odds of a hike were as low as 17.4% just over a week ago show how expectations for a Fed pause have been abandoned, helping the U.S. dollar rise for a third week and weigh on gold prices,” City Index senior market analyst Matt Simpson said.