Gold Prices Plummet Below $2,000 as Economic Data, Fed Dampen Investor Confidence

Gold fell beneath $2,000 on Tuesday after U.S. financial knowledge and hawkish remarks from Federal Reserve officers drove bets that rate of interest cuts could also be delayed, whereas merchants saved an eye fixed on the U.S. debt-ceiling talks.

Spot gold was 1.2% down at $1,996.29 per ounce by 11:50 a.m. EDT (1550 GMT), after touching its lowest in two weeks at $1,994.59 earlier.

U.S. gold futures fell 1.1% to $2,000.20.

U.S. retail gross sales elevated lower than anticipated in April, however the underlying development was strong, driving an uptick within the greenback and sending 10-year Treasury yields to a two-week excessive. [USD/] [US/]

Richmond Fed President Thomas Barkin mentioned he was “comfortable” with raising interest rates further if needed to lower inflation. Cleveland Fed chief Loretta Mester said the U.S. central bank was not at a point yet where it can hold rates steady for a period of time.

This followed hawkish comments from other Fed officials on Monday.

“We needed to see more signs of a pivot from the Federal Reserve and we haven’t really fully seen that yet,” mentioned Craig Erlam, a senior market analyst at OANDA.

High interest rates dull non-yielding bullion’s appeal, although its considered a hedge against economic uncertainties.

But overall, traders could keep buying any dip in gold prices “as they wait out this debt ceiling fiasco”, mentioned Phillip Streible, chief market strategist at Blue Line Futures, in Chicago.

Democratic President Joe Biden and high congressional Republican Kevin McCarthy will sit down at 3 p.m. EDT to attempt to make progress on a deal to boost the debt ceiling and avert an economically catastrophic default.

Spot silver slid 1.9% to $23.65 per ounce. Platinum misplaced 0.4% at $1,060.56 and palladium fell 1.7% to $1,505.88.

(This story has not been edited by News18 employees and is revealed from a syndicated information company feed)