- Gold could remain in $1,965-$2,020 range in May – analyst
- Biden, McCarthy push forward towards U.S. debt-ceiling deal
- Silver, platinum fall
By Arundhati Sarkar
May 18 (Reuters) – Gold prices were little changed on Thursday as the dollar held firm and optimism over U.S. debt-ceiling talks chipped away at the metal’s safe-haven appeal.
Spot gold was flat at $1,979.76 per ounce by 0445 GMT. U.S. gold futures fell 0.1% to $1,982.60.
The dollar index .DXY traded near a seven-week high reached in the previous session, making gold less affordable for overseas investors.
Gold could remain in the $1,965-$2,020 range over the next two weeks, but the general trend remains fairly weak as increasing optimism around the debt ceiling is also likely to heap pressure on bullion, said Edward Meir, a metals analyst at Marex.
Many of the U.S. macro numbers have come in stronger than expected and this is leading to perceptions that the Fed will probably not pause in June, and the spectre of higher rates is bearish for gold, Meir added.
U.S. President Joe Biden and top congressional Republican Kevin McCarthy on Wednesday underscored their determination to reach a deal soon to raise the federal government’s $31.4 trillion debt ceiling and avoid an economically catastrophic default.
In the broader market, Asia-Pacific share indexes rallied, following Wall Street’s lead.
“To some extent, there was tentative progress with the debt ceiling, and that takes away some market uncertainty, lending a modest boost to sentiment,” said OCBC FX strategist Christopher Wong, adding this weighed on gold prices.
Meanwhile, markets are pricing in a 76.2% chance of the U.S. central bank holding rates at current levels in June, according to the CME FedWatch tool, and traders have also dialled back expectations of a rate cut this year.
Rising interest rates dull non-yielding bullion’s appeal.
Spot silver fell 0.4% to $23.63 per ounce, platinum shed 0.3% to $1,065.08, while palladium rose 0.1% to $1,488.21.
The decline in silver so far this month “could be closer to some tentative stabilisation,” Wong added.