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Gold prices recovered a little ground on Wednesday as the impasse over the U.S. debt-ceiling in Washington boosted demand for safe havens following the yellow metal’s worst weekly selloff since February last week.
Price action
-
Gold futures for June delivery
GC00,
-0.60% GCM23,
-0.60%
edged up by $1.30, or nearly 0.1%, to $1,975.80 per ounce on Comex. -
July silver
SI00,
-1.71% SIN23,
-1.71%
declined by 17.9 cents, or 0.8%, to $23.445 per ounce. -
Palladium for June delivery
PAM23,
-3.61%
fell by $30.20, or 2.1%, to $1,416.50 per ounce, while platinum for July delivery
PLN23,
-2.62%
retreated by $12.10, or 1.1%, to $1,045.50 per ounce. -
Copper for July delivery
HGN23,
-2.61%
declined by 5.7 cents, or 1.6%, to $3.5975 per pound.
Market drivers
Gold prices posted gains in five of the last six months as the U.S. dollar has retreated, but gold has reversed some of these gains over the past two weeks, as investors favored the U.S. dollar as a potential safety play to protect them from any blowback unleashed by the debt-ceiling impasse in Washington.
Fortunately for gold bulls, worries about a potential U.S. default once again benefited gold prices on Wednesday.
“The impasse on U.S. debt ceiling talks has raised the prospect of the world’s largest economy defaulting and kept gold well supported around $1,975 an ounce,” said Rupert Rowling, a market analyst at Kinesis Money, in emailed commentary.
Still, modest strength in the U.S. dollar helped to limit any gains for gold Wednesday.
“If we are to see continued strength in the dollar and rates resume their move higher, it is hard to imagine gold holding above the uptrend,” analysts at Sevens Report Research wrote in Wednesday’s newsletter.
In Wednesday dealings, the ICE U.S. Dollar index
DXY,
added nearly 0.2% to 103.64. It trades around 2% higher month to date, putting pressure on dollar-denominated prices of gold.
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