Bengaluru — Gold prices edged higher on Thursday, aided by a weaker dollar and economic worries, while investors sought further clarity on the US Federal Reserve’s monetary policy path.
Spot gold was up 0.2% at $2,032.74/oz, at 3.27am GMT. US gold futures were up 0.1% at $2,038.90.
The dollar index dipped for a second consecutive day, making the greenback-priced bullion more affordable for overseas buyers.
“While gold remains supported overall, it doesn’t look overly happy at these highs and investors seem quick to book profits with any break above $2,050 for now,” said Matt Simpson, senior market analyst at City Index.
Bullion prices initially rose on Wednesday after US inflation data was released, before turning negative on profit-taking.
The annual increase in US consumer prices slowed to below 5% in April for the first time in two years, potentially providing cover for the US central bank to pause interest rate hikes in June.
Markets are currently pricing in a 99.7% chance of the Fed holding rates at their current level in June.
Lower interest rates boost non-yielding bullion’s appeal.
“The debt ceiling debacle seems to have thrown a floor under gold prices. But that’s not to say it may sell off sharply should the ceiling be raised while the Fed are in pause mode and investors are on the hunt for weak US data,” Simpson said.
Meanwhile, US President Joe Biden piled pressure on Republican legislators on Wednesday to move quickly to raise the country’s $31.4-trillion debt ceiling or risk throwing the world’s largest economy into a recession.
“Gold continues to be supported by central bank buying, a reopening in China, geopolitical skirmishes and a quiet revival in gold ETF [exchange traded funds] and OTC [over-the-counter] demand,” the World Gold Council (WGC) said.
Spot silver fell 0.3% at $25.34/oz, platinum was flat at $1,113.96 while palladium lost 0.4% at $1,600.05.
Reuters
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