In a positive turn for gold investors, gold futures closed higher on Tuesday (May 30), boosted by a weakening dollar and a decline in US Treasury yields. The market received additional support as investors eagerly awaited the US Congress’ decision on passing a bill to increase the debt ceiling.
Gold futures experienced a rise of $14, or 0.71%, closing at $1,977.10 per ounce. Conversely, silver futures saw a decrease of 12.10 cents, or 0.52%, settling at $23.239 per ounce. Platinum futures were down $6.20, or 0.60%, at $1,021.90 per ounce. Palladium futures suffered a decline of $28.60, or 2%, closing at $1,397.50 per ounce.
The dollar index, which measures the performance of the US dollar against a basket of six major currencies, decreased by 0.10% to 104.1665. Simultaneously, the 10-year Treasury yield fell to 3.735% overnight.
A weaker dollar makes gold contracts, priced in dollars, more interesting for investors holding other currencies. Additionally, the decrease in US Treasury yields reduces the opportunity cost of holding gold, as gold does not provide interest like other assets.
Over the past weekend, President Joe Biden and US House Speaker Kevin McCarthy reached an agreement to extend the debt ceiling. This development marks a significant step in pushing the bill to increase the debt ceiling through Congress before the impending June 5 deadline, known as the X-date, when the US government could face a historic default.
The bill is scheduled for a vote in the US House of Representatives on Wednesday, May 31, before it progresses to the US Senate. If approved by the Senate, it will proceed to President Biden for his signature, allowing it to take effect. The legislative process must be completed before the June 5 deadline to avoid a potential default.
Investors will closely monitor US labor data throughout the week. The US Bureau of Labor Statistics will release the April job openings and labor turnover figures (JOLTS), while Automatic Data Processing Inc. (ADP) will publish the May private payroll figures on Thursday. Additionally, the US Department of Labor will provide the number of weekly jobless claims.
On Friday, the US Department of Labor will release the highly anticipated non-farm payrolls numbers for May. Analysts predict a rise of 180,000 jobs, reflecting a slowdown compared to the 253,000 jobs added in April. The unemployment rate is expected to increase to 3.5% in May from 3.4% in April.
The Spot Market is Open
Wednesday, May 31, 2023