Gold steady after release of Fed minutes, debt talks in focus

Thursday,   25-May-2023   08:17 AM (IST)

Gold prices held steady on Thursday after minutes from the U.S. Federal Reserve’s last meeting signalled a likely pause in the rate-hike campaign in June, while debt ceiling negotiations kept investors on the edge. Spot gold was flat at $1,957.69 per ounce by 0034 GMT. U.S. gold futures were down 0.2% at $1,960.10. The dollar index held firm close to the previous session’s high. A stronger dollar makes bullion less attractive for overseas buyers. U.S. Treasury Secretary Janet Yellen on Wednesday maintained early June as a debt ceiling default deadline and said she will update Congress shortly about government finances. Fed officials “generally agreed” last month that the need for further interest rate increases “had become less certain,” with several saying that the quarter-percentage-point hike they approved might be the last, according to minutes of the May 2-3 meeting released on Wednesday. Fed governor Christopher Waller said that while skipping an interest rate hike at the meeting next month may be possible, an end to the hiking campaign isn’t likely. Expectations for another 25-basis-point hike at the Fed’s next meeting are currently at 33.6% according to CME’s FedWatch Tool. Negotiators for Democratic President Joe Biden and top congressional Republican Kevin McCarthy held what both sides called productive talks on Wednesday to try to reach a deal to raise the United States’ $31.4 trillion debt ceiling and avoid a catastrophic default. Global stock indices will end this year higher than where they started, but most are set to be confined to ranges in coming months even as central banks approach the endgame for interest rate rises, according to Reuters polls of market strategists. Spot silver fell 0.3% to $23.03 per ounce, platinum rose 0.1% to $1,024.26. Palladium steady at $1,416.19.