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U.S. banks report tighter lending standards - Fed survey
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U.S. CPI for April due on Wednesday
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Palladium up more than 4%
(Updates prices)
By Deep Kaushik Vakil
May 8 (Reuters) - Gold edged higher on Monday, regaining
some ground after a retreat in the previous session and ahead of
inflation data this week that could provide clues on the outlook
for U.S. interest rates.
Spot gold rose 0.2% to $2,021.37 per ounce by 3:15
p.m. ET (1915 GMT). U.S. gold futures settled up 0.4% at
$2,033.20.
"Markets are really just discounting the aftermath of last
Friday's payrolls report," Daniel Ghali, commodity strategist at
TD Securities, said, referring to a selloff that has left prices
nearly 3% below near record levels reached last week before the
data.
It showed U.S. job growth accelerated in April, pointing to
persistent labour market strength.
Ghali added, however, the prospect of recession was likely
to make markets price in future Fed rate cuts, which should lead
"discretionary traders to deploy their capital in gold".
Non-yielding gold has greater appeal to investors when interest
rates fall and reduce competition from other assets.
Markets saw an 85% chance of the Fed holding rates at their
current level in June, and a 31% chance of a rate cut in July,
according to CME's FedWatch tool.
U.S. banks tightened credit standards over the first months
of the year and saw weakness in loan demand from businesses and
consumers, the Fed's senior loan officer opinion survey showed.
Chicago Fed chief Austan Goolsbee said in an interview with
Yahoo Finance that he was getting "vibes" a credit squeeze is
beginning.
"If the woes among regional banks are thrust back into the
spotlight, that could trigger another leg up for this safe-haven
asset," said Han Tan, chief market analyst at Exinity.
Along with the U.S. consumer price index (CPI) due on
Wednesday, traders are also monitoring any developments
surrounding the debt ceiling.
Spot silver fell 0.4% to $25.54 per ounce, platinum rose 1.3% to $1,072.99, while palladium jumped
4.3% to $1,554.35.
(Reporting by Deep Vakil and Arundhati Sarkar in Bengaluru;
Editing by Christina Fincher, Barbara Lewis and Shounak
Dasgupta)
