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Bullion remains supported above $2,000 - analyst
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Powell, Fed officials due to speak this week
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Biden to meet lawmakers on Tuesday on debt ceiling talks
(Updates prices)
By Arundhati Sarkar
May 15 (Reuters) - Gold regained its footing on Monday
after three straight sessions of losses as the dollar eased and
investors remained wary of the U.S. debt ceiling standoff that
could fuel worries of a global economic slowdown.
Spot gold was up 0.1% to $2,013.99 per ounce by
1132 GMT, having hit its lowest since May 5 on Friday. U.S. gold
futures were mostly unchanged at $2,018.80.
"Bullion remains supported above $2,000 by persistent anxiety over ongoing U.S. debt-ceiling talks as well as hopes that the Fed is done with its rate hikes," said Han Tan, chief market analyst at Exinity. U.S. consumer sentiment slumped to a six-month low in May on worries that political haggling over raising the federal government's borrowing cap could trigger a recession.
U.S. President Joe Biden said he expects to meet with congressional leaders on Tuesday for talks on a plan to raise the nation's debt limit and avoid a catastrophic default. "Still, gold risks being temporarily dragged back into the sub-$2,000 domain on a major risk-on wave stemming from a deal to lift the U.S. debt ceiling in the immediate term," Exinity's Tan said.
He added that bullion may also be forced to pare more of its
recent gains if Fed speakers signal another rate hike.
While bullion tends to gain during events of uncertainty,
higher interest rates dim its appeal.
A host of Fed officials including Chair Jerome Powell are
due to speak this week. Markets are pricing in a 78.8% chance of
the Fed holding rates at the current level in June, according to
the CME FedWatch tool.
Fed Governor Michelle Bowman said on Friday the central bank
probably will need to raise interest rates further if inflation
stays high.
Elsewhere, spot silver rose 0.5% to $24.02 per
ounce, platinum gained 1.3% to $1,062.87, and palladium climbed 1.4% to $1,530.33.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Jan
Harvey and Louise Heavens)
