Gold prices remain stable in early trade

24 May 2023 , 09:42 AM

On Wednesday, gold prices remained stable as investors evaluated the likelihood of additional Federal Reserve rate hikes and another round of negotiations to extend the U.S. government’s debt ceiling failed to produce any significant results.

Spot gold remained stable at $1,975.99 per ounce. American gold futures increased by 0.1% to $1,977.10.

The dollar index remained stable, keeping gold prices in check.

According to a video a Fox News producer released on Twitter, U.S. House Speaker Kevin McCarthy stated he does not believe a deal on raising the government’s debt ceiling would get done on Tuesday.

As the deadline to increase the government’s $31.4 trillion borrowing limit or risk default approached, representatives of U.S. President Joe Biden and congressional Republicans called off another round of negotiations on the debt ceiling on Tuesday without reaching an agreement. In as little as nine days, the country might default.

According to new research from a former top economist at the International Monetary Fund and the Federal Reserve, a tight labour market in the United States and rising wages are starting to have a greater impact on inflation and could cause prices to rise more quickly if this trend continues.

On Wednesday, the Federal Reserve’s May meeting’s minutes are due. According to the CME FedWatch tool, markets now predict that the Fed will hold rates next month by a 73.1% margin.

The Reuters Tankan survey revealed that big Japanese manufacturers’ business sentiment changed for the first time this year and that service sector morale reached a five-month high, adding to the signs that the economy is recovering from the COVID-led slowdown.

Spot silver increased by 0.3% to $23.48 an ounce, platinum increased by 0.4% to $1,052.45 and palladium increased by 0.7% to $1,455.33 respectively.

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