Gold Higher as US Debt Ceiling Talks, Fed’s Stance in Focus

Gold prices rise as traders await clarity on U.S. debt ceiling negotiations and Federal Reserve’s interest rate strategy. Gold prices influenced by US debt ceiling negotiations, Federal Reserve’s interest rate path

Gold is seen as a safe-haven investment amid concerns over the debt ceiling. The impact of US default on gold could be more significant than upcoming the Fed’s next meeting.

Gold prices are edging higher on Monday, as traders looked for more clarity around the US debt ceiling negotiations and the Federal Reserve’s interest rate path. The decline in the dollar index has also made gold more affordable for international buyers.

At 10:13 GMT, Gold (XAU) is trading at $1979.55, down $1.38 or -0.07%. On Friday, the SPDR Gold Shares ETF (GLD) settled at $183.63, up $1.79 or +0.98%. At the time of writing, gold is trading around $1976 per ounce at the time of writing.

Gold traders are closely monitoring the ongoing discussions about the US debt ceiling. This, along with comments from Federal Reserve Chair Jerome Powell indicating a less aggressive stance, has increased the appeal of gold as a safe-haven investment.

Concerns surrounding the debt ceiling are providing support for gold prices, and there is a strong interest in whether a resolution will be reached. The outcome of these talks is seen as more significant for gold than the upcoming Federal Reserve meeting, as a U.S. default could happen before the meeting and impact the Fed’s decision-making.

Traders are also looking for indications of the future interest rate strategy of the U.S. central bank, following Powell’s suggestion of a possible pause in June policy. The minutes of the recent Federal Open Market Committee meeting will be released soon, but the debt limit discussions may overshadow other economic reports.