Gold Futures Settle Near 3-week Low
Gold futures settled notably lower on Tuesday after hawkish comments from Federal Reserve officials. Traders also awaited the outcome of debt ceiling negotiations in Washington.
The dollar’s recovery from early weakness also weighed on gold prices. The dollar index, which dropped to 102.20 in the Asian session, climbed to 102.69 a little before noon, gaining nearly 0.25%.
Gold futures for July ended lower by $29.70 or about 1.5% at 1,933.00 an ounce, the lowest settlement for the most-active contract in about three weeks.
Silver futures for July ended down $0.398 at $23.893 an ounce, while Copper futures for July settled at $3.6670 per pound, down $0.0840 from the previous close.
Edward Moya, Senior Market Analyst at OANDA, says bullion is lower as Wall Street awaits a meaningful update with debt ceiling talks.
“The soft landing hopes are still hanging onto a thread and that is keeping some investors from going aggressive into safe-havens,” says Moya. “Too many risks remain on the table for investors to go offensive. Risk aversion could get a boost from regional banking fears, debt ceiling drama, and a weakening consumer, but it will likely come from a new catalyst.”
Data from the Commerce Department showed retail sales rose by 0.4% in April after falling by a revised 0.7% in March. Economists had expected retail sales to climb by 0.7% compared to the 1% slump originally reported for the previous month.
Excluding an increase in sales by motor vehicle and parts dealers, retail sales still rose by 0.4% in April after sliding by 0.5% in March. The rebound in ex-auto sales matched economist estimates.
A separate report from the Federal Reserve showed industrial production climbed by 0.5% in April, while revised data showed production was unchanged in each of the two previous months.
Economists had expected industrial production to come in unchanged compared to the 0.4% increase originally reported for the previous month.
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