Global gold prices remained low near a two-month low on Tuesday as optimism over a US debt ceiling deal and lower expectations of a Fed rate hike in June dampened interest in gold investment. Today's forex news on world gold spots is summarized directly from the trusted tradingview.com site.


Spot gold fell 0.2% to $1,938.57 an ounce by 0448 GMT. Meanwhile, US gold futures also fell 0.3% to $1,938.30. US President Joe Biden expressed his joy on Monday at the prospect of the debt ceiling deal he reached with House of Representatives Speaker Kevin McCarthy passing through Congress. According to Michael Langford, director of advisory firm AirGuide, high-volatility events such as the US regional banking crisis, and the uncertainty of whether or not a deal to raise the US debt ceiling will be reached, are behind him. This "has reduced the market's appetite for gold as investors seek alpha." The statement suggests that with a deal to raise the US debt ceiling in place, concerns about the financial crisis and economic uncertainty have eased. On the other hand, in recent days, Federal Reserve (Fed) officials have adopted a hawkish view on interest rates, which has partly offset the influx of funds into safe-haven assets such as bullion due to the US debt ceiling situation. Rising interest rates tend to reduce the appeal of non-yielding gold. After the 2008 financial crisis, Minneapolis Federal Reserve President Neel Kashkari was initially concerned about systemic risk. But as the current U.S. monetary policymaker, he is more concerned about inflation. "If a more dovish approach is taken by the end of the year, that could mean some degree of rate easing, which would be seen as a positive signal for the stock market and could also reduce investor appetite for gold relative to other, riskier assets," Langford notes. The market is currently pricing in a 39.9% chance that the Fed will leave rates unchanged in June.

 


Also Read : Global Gold Prices Flat Ahead of Fed Meeting


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