Gold prices held close to a two-month low on Tuesday as a U.S. debt ceiling deal and reduced bets for a pause in rate hikes in June dented the metal's appeal.
U.S. President Joe Biden said on Monday he feels good about prospects for passage by Congress of theThe high volatility events such as the U.S. regional banking crisis, and whether or not an agreement would be reached on raising the U.S. debt ceiling are now passing, "reducing the markets interest in gold as investors seek alpha," Michael Langford, director at corporate advisory AirGuide said.
Fed officials on the other hand have in recent days turned up the heat with a hawkish outlook on interest rates, and that has to some extent also offset safe-haven flows around the U.S. debt ceiling situation as higher interest rates dull the appeal for zero-yield bullion.worries about systemic risks. But now, as a U.S. monetary policymaker, he worries even more about inflation.
"If later in the year a more dovish approach is taken, this then implies some level of easing of interest rates may occur, which will be seen as bullish for equities and also reduce the desire for investors to hold gold versus other more risk on asset classes," Langford noted.
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