Gold prices hit almost 2-month lows this Tuesday, May 23, pressured by the strengthening of the dollar and the yield of US Treasury bonds, due to the growing bets for an increase in interest rates, while the markets awaited progress in the negotiation on the debt ceiling.
Spot gold was down 0.1% at $1,976.10 an ounce.
Other metals are also trading lower. spot silver falls 1% to $23.64 an ounce; platinum fell 1.6% to $1,059.65; and palladium lost 2.9% to $1,449.28.
The dollar index rises 0.3%, making greenback gold less attractive to foreign buyers, while benchmark note yields hovered around 10-week highs.
“For now, the market has not completely ruled out another rate hike and it’s clearly not what it looked like just a month ago that is causing this price reset.”said Ole Hansen of the Sax Bank.
Bullion often falls out of favor with investors when rates rise, as it does not earn interest. For this reason, prices are down more than $100 from the all-time high reached at the beginning of the month.
Investors are also watching developments around the US debt ceiling, which if not exceeded could lead to an economic recession.
The president, Joe Biden, and the Republican leader of the House of Representatives, Kevin McCarthy, could not reach an agreement on Monday, but they promised to continue talking.
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.