Gold retreats, adding to losses from worst week since February
NEW YORK (May 22) Gold prices headed lower on Monday, adding to last week’s losses, as traders waited to see how the debt-ceiling debate in Washington would shake out — while a stronger U.S. dollar has eaten away at some of the yellow metal’s gains.
Price action
- Gold futures for June delivery GC00, -0.21% GCM23, -0.20% were off by $6.50, or 0.3%, at $1,975 an ounce on Comex.
- Silver futures for July delivery SIN23, -0.58% fell by 15 cents, or 0.6%, at $23.91 per ounce.
- Palladium prices for June delivery PAM23, -0.58% shed $10,80, or 0.7%, to $1,513 per ounce. Platinum prices for July delivery PLN23, 0.61% rose by $8, or 0.8%, to $1,083 per ounce.
- July copper HGN23, -1.05% shed 5 cents, or 1.2%, to $3.69 per pound.
Market drivers
The ICE U.S. Dollar Index, a key gauge of the U.S. dollar’s value compared with its rivals, rose to its highest level since March late last week, although it was marginally lower on Monday. It stood at 103.1 on Monday DXY, -0.06%, off 0.1% on the day.
Still, the dollar’s revival in recent weeks has coincided with a pullback in gold prices as a stronger greenback makes gold — which is priced in dollars — more expensive for buyers using rival currencies.
Debt-ceiling talks have ground to a standstill, with traders waiting to see whether a deal might be reached by the end of the week, or if Monday’s talks might yield any progress.
Gold had benefited from debt-ceiling and recession fears, and some analysts expect the yellow metal could continue to rally after a brief breather — although if the dollar also continues to climb, it could create obstacles to further upside in gold, analysts said.
“Gold prices have started to cool off after recording stellar gains, and last week we saw more traders booking their profits. However, we do strongly believe that the shinning metal does represent an opportunity at current levels,” Naeem Aslam, chief investment officer at Zaye Capital Markets, said in emailed commentary.
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