Last Updated: May 24, 2023, 00:15 IST
FILE PHOTO: A saleswoman shows gold bangles to a customer at a jewellery showroom on the occasion of Akshaya Tritiya, a major gold buying festival, in Kolkata, India, May 3, 2022. (Image: Reuters)
Spot gold was down 0.1% at $1,967.03 per ounce by 11:57 a.m. EDT (1557 GMT), after shedding as much as 0.8% earlier
Gold prices dipped on Tuesday as yields climbed while talks over raising the U.S. debt limit stretched to another round, but recovered from session lows as the dollar retreated from earlier highs.
Spot gold was down 0.1% at $1,967.03 per ounce by 11:57 a.m. EDT (1557 GMT), after shedding as much as 0.8% earlier.
U.S. gold futures fell 0.4% to $1,969.20.
Gold rose from session lows on reports of further negotiations over raising the debt ceiling, said Daniel Pavilonis, senior market strategist at RJO Futures.
Republicans in the U.S. House of Representatives said they were making little progress in negotiations with the White House over raising the debt ceiling, with the nation facing the risk of default in as soon as nine days.
Wall Street’s main indexes fell and the dollar index backed off from its session high. [.N] [USD/]
But “the inverse correlation between yields and gold is still there”, Pavilonis said, expecting gold to pull back as benchmark Treasury yields hovered near their two-month highs. [US/]
Bullion has lost more than $100 an ounce from its near-record peak hit earlier this month, mainly pressured by growing bets on interest rates staying higher for longer.
“For now the market has not entirely ruled out another rate hike, and that’s clearly not what (it) was looking (like) just a month ago and that’s leading to this realignment of prices,” said Ole Hansen, head of commodity strategy at Saxo Bank.
Minneapolis Fed President Neel Kashkari said on Tuesday U.S. rates may have to go “north of 6%”.
Gold tends to lose appeal when rates rise and push up bond yields, increasing the opportunity cost of holding zero-yield bullion.
Investors now await the minutes from the Federal Open Market Committee’s May 2-3 meeting on Wednesday.
Silver fell 1% to $23.42 per ounce, platinum was down 1.2% at $1,054.76 and palladium lost 1.8% at $1,463.47.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed – Reuters)