Gold reclaims $1960s on US debt ceiling hopes, lower US bond yields

Gold price stays above the $1960 mark, it is trading at $1962.09 at the time of writing, even preparing for over 1.3% monthly losses in May. Expectations of resolving the US debt ceiling issue spark a dip in US Treasury bond yields, offering a lift to the Gold Index.

Dovish language by Fed officials and robust US job openings data paint a mixed economic picture, potentially impacting gold’s future trajectory. Gold price advanced during the day but remained set to achieve monthly losses of more than 1.30% in May, portraying modest gains, and is trading back above the $1960 area. Factors like confidence for removing the debt ceiling in the United States, with the US House set for a vote on Wednesday night, spurred a plunge in US Treasury bond yields, a tailwind for XAU/USD prices.

The US House of Representatives held a procedural vote, “which allows for the start of the debate and then a vote on the bill itself, passed by a vote of 241-187, with 52 Democrats needed to overcome the opposition of 29 Republicans.