In a day marked by a stronger dollar and concerns over increasing interest rates, gold futures experienced a decline on Monday (May 22). Meanwhile, investors eagerly awaited the outcome of the ongoing debt ceiling talks between US President Joe Biden and US House Speaker Kevin McCarthy.
Gold futures slipped by $4.40, accounting for a 0.22% decrease, settling at $1,977.20 per ounce. Similarly, silver futures saw a dip of 19.90 cents, or 0.83%, resting at $23.861 per ounce. Conversely, platinum futures displayed a modest increase of $1.60, equivalent to 0.15%, reaching a closing value of $1,077.30 per ounce. Palladium futures, on the other hand, encountered a more significant drop of $31.60, representing a 2.1% decline, ending at $1,492.20 per ounce.
Investors remain apprehensive about the upward trajectory of interest rates. These concerns were amplified by recent comments from James Bullard, President of the St. Louis Fed, who emphasized the necessity of an additional 0.50% interest rate hike within this year. Bullard warned that failure to address inflation risks could lead to a resurgence reminiscent of the 1970s, stressing the importance of maintaining a robust labor market.
The primary focus of investors centers around the latest round of negotiations regarding the debt ceiling, spearheaded by President Biden and Speaker McCarthy. Despite discussions between Republican and Democratic working groups last week, no progress has been made, leaving a mere 10 days before the debt default deadline.
Rupert Rowling, an analyst at Kinesis Money, highlighted the historical trend of recession fears and concerns surrounding the US debt ceiling driving investors toward gold as a safe-haven asset. This time, if Congress and the White House manage to reach an agreement on raising the debt ceiling, it is anticipated that gold prices will find medium-term support at the $1,950 level.
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Tuesday, May 23, 2023