Gold prices steady with focus on US debt-ceiling talks

Gold prices held steady in early Asian trade on Wednesday after retreating from the key $2,000-an-ounce mark in the previous session, while investors kept their eyes peeled for an outcome from the U.S. debt-limit negotiations.

FUNDAMENTALS

Spot gold held its ground at $1,992.19 per ounce by 0032 GMT. U.S. gold futures edged 0.1% higher to $1,995.40.

U.S. President Joe Biden and top congressional Republican Kevin McCarthy edged closer to a deal to avoid a looming U.S. debt default, as the threat of an economic nightmare prompted Biden to cut short an Asia trip this week.

U.S. retail sales increased less than expected in April, but the underlying trend was solid, suggesting that consumer spending likely remained strong early in the second quarter, despite growing risks of a recession this year.

On the central bank front, Atlanta Fed president Raphael Bostic said on Tuesday the U.S. Federal Reserve will need to stay “super strong” in fighting inflation even if the unemployment rate starts to rise later in the year,

Traders are currently pricing in an 85% chance of the U.S. central bank holding rates in June, according to the CME FedWatch tool.

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