Gold prices dip in early trade

16 May 2023 , 08:26 AM

As traders evaluated statements made by U.S. central bank officials regarding the continuation of high-interest rates and as the market focused on developments in the debt-ceiling battle, gold prices dropped in early Asian trade on Tuesday.

Spot gold had down 0.3% to $2,014.62 per ounce, while U.S. gold futures had fallen 0.2% to $2,018.90.

On Monday, U.S. central bankers indicated they expected interest rates to remain high and, if anything, increase in light of inflation that may be slow to decrease and an economy that is only just beginning to show indications of weakening.

Raphael Bostic, president of the Atlanta Fed, however, stated that he was ‘inclined’ to keep interest rates unchanged at the next meeting.

According to the CME FedWatch tool, markets presently assume a 75.3% likelihood that the U.S. central bank will maintain rates at their current level in June.

The U.S. Treasury Department said on Monday that it anticipates the U.S. government will only be able to pay its payments through June 1 without a rise in the debt ceiling, putting more pressure on congressional Republicans and the White House to come to an agreement soon.

With less than two weeks left before the United States government would run out of money to pay its debts, President Joe Biden and Republican House Speaker Kevin McCarthy got ready for crucial debt-ceiling discussions.

The New York Federal Reserve reported on Monday that their indicator of industrial activity in New York State fell in May, although it is difficult to analyse because the survey is so unpredictable.

Spot silver decreased by 0.3% to $24.05 per ounce, while palladium decreased by 0.3% to $1,528.20 and platinum dipped by 0.1% to $1,063.68.

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