“Gold Prices Turn Lower on the Rise of Dollar Index and Uncertainty over Monetary Policy”

Investing.com – Gold prices turned lower during these trading moments, today, Thursday, after they were high, in conjunction with the rise of the dollar index, while investors sought more clarity about the path of monetary policy.

On an annual basis, US inflation data slowed Thursday, which led to significant fluctuations during yesterday’s trading.

Today, investors are awaiting the release of the US Producer Price Index and Unemployment data.

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Gold and the dollar now

It fell by 0.1% to $2035.

It fell by 0.05%, at $2029 an ounce.

While it rose by 0.2%, at 101.45 points.

gold when settling yesterday

Gold prices fell at the settlement of transactions, yesterday, Wednesday, after they rose immediately after the release of inflation data.

And gold futures fell at the settlement, by 0.3%, or the equivalent of $ 5.8, to reach $ 2037.1 an ounce.

Gold does not seem happy with these gains

“While gold remains generally supported, it doesn’t look very happy with these gains and investors seem to be rushing to book profits with any break above $2050 at the moment,” said Matt Simpson, senior market analyst at City Index. .

Bullion prices initially rose on Wednesday after the release of US inflation data, before turning lower on profit-taking.

The annual increase in US consumer prices slowed to less than 5% in April for the first time in two years, which could provide cover for the US Federal Reserve to stop raising interest rates next month.

Markets are currently pricing in a 95% chance that the Fed will keep interest rates at their current level in June. Low interest rates enhance the attractiveness of non-yielding bullion.

debt ceiling crisis

Meanwhile, US President Joe Biden increased pressure on Republican lawmakers on Wednesday to move quickly to raise the country’s $31.4 trillion debt ceiling or risk plunging the world’s largest economy into a recession.

Detailed talks on raising the US government’s $31.4 trillion debt ceiling began on Wednesday amid Republicans’ insistence on deep spending cuts, the day after the first meeting in three months between Democratic President Joe Biden and Republican House Speaker Kevin McCarthy.

The Treasury Department also announced that government tax revenues in April confirm their recent decline, which could increase pressure on Congress to quickly reach an agreement on the public debt ceiling given rising spending.

Republican Representative Frank Lucas ruled out that his colleagues in the House of Representatives would agree to budget cuts of the size they proposed, but he expected the possibility of reaching a compromise to reduce what he described as the “gluttonous spending” of the Democrats.

Significant disagreements remain due to pressures to cut spending on the one hand and raise taxes on the other.

Biden indicated his openness to Republicans’ request to recover some unused funds from the COVID-19 aid package, an amount of less than $80 million. At the same time, the White House reaffirmed its support for legislation that would speed up government approval of energy projects by setting timetables.

“Default is not on the table,” Biden told reporters after Tuesday’s meeting. “I have informed congressional leaders that I am prepared to begin a separate discussion on my budget proposal.”

“It appears that the debt ceiling debacle has supported gold prices,” Simpson added. “But this does not mean that it could see a sharp decline if the ceiling is raised.”