Gold prices retreat ahead of market-moving data release and US debt deal passage

Investing.com – Gold prices fell on Thursday, affected by the successful passage of the US debt deal in the US House of Representatives, and the stability of…

At the same time, prices are moving in a narrow range in anticipation of the release of important data that is expected to move the markets and change trends, and it will be released today, along with , and also.

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Gold and the dollar now

It fell by 0.18% to $1,978 an ounce.

While it fell by 0.05% to 1961 dollars an ounce.

On the other hand, the dollar index settled without rising or falling, at 104,245 points.

gold when settling yesterday

Gold prices rose upon settlement of transactions, yesterday, Wednesday, in conjunction with the market’s focus on the path of interest.

And the financial markets turned to favor the Federal Reserve’s tendency to fix interest rates during the next monetary policy meeting in June, yesterday, Wednesday, as the “Feed Watch” tool showed an increase in the probability of fixing the interest rate to approximately 67%, compared to 33% for raising interest rates by 25 basis points.

Upon settlement, gold futures rose 0.3%, or the equivalent of $5, to $1,982.1 an ounce.

The debt deal bypasses the House of Representatives

A majority of US House of Representatives voted on Wednesday to approve a bipartisan bill to suspend the government’s $31.4 trillion debt ceiling, just five days before a deadline to avoid a massive default.

314 deputies voted for the bill, compared to 117 who voted against it.

And now the Senate will have to pass it in order for President Joe Biden to publish it into law within 5 days at most.

The US President welcomed this step and said that the House of Representatives had taken an essential step to avoid the failure of the United States, for the first time in its history, to pay its debts.

debt ceiling crisis

Investors had a muted reaction to the US House of Representatives passing a bill, which could suspend the government’s borrowing limit and avoid default, with market focus now shifting towards the Senate and interest rate expectations.

Brian Lan of Gold Silver Central, a gold trading company in Singapore, said that gold prices may rise to a level close to $ 1980 in the near term, but it will not witness a significant upward movement because the markets are still speculating that the US central bank will raise at greater rates.

Meanwhile, data from the Bureau of Labor Statistics revealed an unexpected rise in the number of job opportunities available, to record 10.103 million opportunities during April. This came in at an increase of 358 thousand from the previous month, and compared to expectations of 9.375 million jobs, indicating continued strength in the labor market that may force the Federal Reserve to raise interest rates again in June.

While data from the Institute for Supply Management showed that the Chicago Composite Purchasing Managers’ Index fell to 40.4 points during the ninth consecutive month of contraction, compared to 48.6 points recorded in April, which renewed recession fears in the world’s largest economies.

Given inflation remains high, gold is likely to outperform platinum and silver as these products are subject to volatility as the respective markets see sustained downward pressure, said Clifford Bennett, chief economist at ACY Securities.