Gold prices eased in early Asian trade on Tuesday as traders assessed comments from U.S. central bank officials on interest rates staying high, while market focus was also on developments in the debt-ceiling debate.
FUNDAMENTALS
* Spot gold was down 0.3% at $2,014.62 per ounce by 0029 GMT, while U.S. gold futures eased 0.2% to $2,018.90.
* U.S. central bankers on Monday signalled they see interest rates staying high and, if anything, going higher, given inflation that may be slow to improve and an economy showing only tentative signs of weakness.
* Atlanta Fed president Raphael Bostic, however, said he was “inclined” to hold interest rates steady at the next meeting.
* While gold is considered a hedge against inflation, rising interest rates dull non-yielding bullion’s appeal.
* Markets are currently pricing in a 75.3% chance of the U.S. central bank holding rates at the current level in June, according to the CME FedWatch tool. * The U.S. Treasury Department reiterated on Monday it expects to be able to pay the U.S. government’s bills only through June 1 without a debt limit increase, increasing pressure on congressional Republicans and the White House to reach a deal in coming days.
* President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy prepared for critical debt-ceiling talks, with a little more than two weeks to go before the U.S. government could run short of money to pay its bills.
* The New York Federal Reserve said on Monday its barometer of manufacturing activity in New York State plunged in May, but the survey is extremely volatile, making it harder to interpret.
* Spot silver fell 0.3% to $24.05 per ounce, platinum edged 0.1% lower to $1,063.68 and palladium shed 0.3% to $1,528.20.
DATA/EVENTS (GMT) 0200 China Retail Sales YY April 0200 China Unemp Rate Urban Area April 0900 EU GDP Flash Estimate QQ, YY Q1 1230 US Retail Sales MM April 1315 US Industrial Production MM April