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Gold prices moved higher on Monday as investors looked to debt-ceiling talks this week that may or may not yield a resolution.
Price action
-
Gold futures for June delivery
GC00,
+0.20% GCM23,
+0.20%
climbed by $5.40, or 0.3%, to $2,025.20 an ounce on Comex, trading between a high of $2,027.50 and low of $2,011.20, FactSet data show. -
July silver
SI00,
+0.56% SIN23,
+0.56%
climbed by 14.1 cents, or 0.6%, to $24.295 per ounce. -
June palladium
PAM23,
+0.94%
gained $31.70, or 2.1%, to $1,545.50 per ounce, while July platinum
PLN23,
+0.68%
added $10.80, or 1%, to $1,077.80 per ounce. -
July copper
HGN23,
+0.47%
gained 2.3 cents, or 0.6%, to $3.7515 per pound.
Market drivers
“Focus this week is on the U.S. debt-limit extension talks between the White House and Congress,” said Jim Wyckoff, senior analyst at Kitco.com.
A second round of debt-ceiling talks between the White House and congressional leaders appeared set for Tuesday, President Joe Biden said Sunday.
“I remain optimistic because I’m a congenital optimist,” Biden told reporters Sunday in Rehoboth Beach, Del. “But I really think there’s a desire on their part as well as ours to reach an agreement. I think we’ll be able to do it.”
House Speaker Kevin McCarthy, R-Calif., on Monday, however, said the White House and congressional Republicans remained “far apart.”
Against that backdrop, the dollar index
DXY,
was off by 0.2% at 102.46 in recent trade, providing support for dollar-denominated gold prices.
“The prospect of the world’s largest economy defaulting is keeping demand for gold and its safe-haven appeal very healthy,” said Rupert Rowling, market analyst at Kinesis Money, in a daily note.” Add in a Federal Reserve that looks to have come to the end of its hiking cycle and the medium-term outlook for gold looks supportive.”
Gold futures remain higher for the month and year so far.
Overall, the precious metal remains supported by U.S. debt ceiling jitters and regional banking concerns, which are fueling gold’s safe-haven appeal, said Fiona Cincotta, senior financial markets analyst at City Index.
She also pointed to a line up of Federal Reserve officials set to speak this week, including Richmond Fed President Tom Barkin on Tuesday.
“Investors will be listening carefully for clues over whether the Fed will likely raise interest rates again in June or press the pause button on monetary policy tightening,” said Cincotta.
On Monday, Atlanta Federal Reserve Bank President Raphael Bostic said that he would like to see the central bank pause its steady rate hikes in order to gauge the health of the economy.
Rowling, meanwhile, said investors are also “closely monitoring” developments in Turkey, where it looks as the presidential election is set to go to a runoff.
“Turkey has been one of the largest buyers of gold in recent years and with the country’s currency taking a battering this year, the latest uncertainty may spur even more demand,” he said.
“With so many questions unanswered and market confidence still very fragile, the current macroeconomic conditions are perfect for gold to thrive in and should keep the price in this elevated territory for a good while yet,” Rowling said.
See: Turkey’s runoff presidential election further complicates the restart of a key oil pipeline
