Gold prices remain flat in early trade

17 May 2023 , 08:33 AM

Following a drop from the crucial $2,000-per-ounce level in the previous session, gold prices remained stable in early Asian trade on Wednesday as investors awaited the conclusion of the U.S. debt-limit negotiations.

Spot gold was unchanged at $1,992.19 per ounce. American gold futures increased by 0.1% to $1,995.40.

As the danger of an economic nightmare forced Biden to cut short a trip to Asia this week, he and senior congressional Republican Kevin McCarthy moved closer to a compromise to avoid a possible U.S. debt default.

Despite rising risks of a recession this year, the underlying trend in U.S. retail sales in April was strong, indicating that consumer spending likely remained strong early in the second quarter.

Regarding the role of the central bank, Raphael Bostic, president of the Atlanta Fed, stated on Tuesday that the U.S. Federal Reserve must continue to be ‘super strong’ in battling inflation even if the unemployment rate rises later in the year.

According to the CME FedWatch tool, traders are currently pricing in an 85% chance that the U.S. central bank will keep rates in June.

The dollar index, which gauges the value of the dollar in relation to six important currencies, remained stable.

As a result of strong private consumption and an unexpected increase in capital investment, Japan’s economy increased an annualized 1.6% in January-March compared to the prior quarter, according to government figures released on Wednesday.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust GLD, reported that its holdings increased by 0.09% to 934.93 tonnes on Tuesday from 934.07 tonnes on Monday.

Spot silver remained unchanged at $23.74 per ounce, while platinum increased by 0.4% to $1,061.43 per ounce. To $1,499.84, palladium decreased by 0.1%.

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