The gold price stalled at a two-month low on Friday and was on the verge of its third straight weekly decline as progress in US debt ceiling negotiations strengthened the dollar.
FUNDAMENTALS
* Spot gold was flat at $1,939.18 an ounce by 0032 GMT, after hitting its lowest since March 22 in the previous session. US gold futures were down 0.2% at $1,939.60.
* Bullion is down 1.9% this week so far, which could be the biggest drop since early February.
* The dollar remained close to its highest point since March 17, making gold less attractive to overseas buyers, while yields on Treasury benchmarks also came close to March’s highs.
* U.S. President Joe Biden and congressional leader Kevin McCarthy appeared to reach an agreement on Thursday to cut spending and raise the $31.4 trillion debt ceiling.
* To add to the pressure on gold, official data showed that new US jobless claims rose slightly last week, pointing to continued strength in the labor market.
* According to the CME FedWatch tool, markets are pricing in a 51.7% chance of a rate hike of 25 basis points in June and a cut no earlier than September.
* Susan Collins, chairman of the Boston Federal Reserve, said Thursday that the time may be right for the US central bank to hit the pause button on its rate hike campaign to see how the impact of the past tightening weighs on activity.
* Gold loses its appeal in a high interest rate environment.
* Spot silver fell 0.4% to $22.68 an ounce, platinum fell 0.1% to $1,019.11 and palladium lost 0.4% to $1,411.12.
DATA/EVENTS (GMT) 1230 US Consumption, Adjusted MM April 1230 US Core PCE Price Index MM, YY April 1230 US PCE Price Index MM, YY April 1230 US Durable Goods April 1400 US U Mich Sentiment Final May
