Gold dips as markets assess Fed rate hike remarks, debt talks in focus

The gold price ranged within a narrow band on Tuesday, as traders analyzed comments by U.S. central banks officials about interest rates remaining high. Meanwhile, the US debt ceiling debate and the risk of default were preventing further losses.

Spot gold

The price of gold fell by 0.2%, to $2,016.72 an ounce, at 0237 GMT.

U.S. Gold Futures

The price of the car dropped by 0.1%, to $2 020.20.

Matt Simpson, senior market analyst for City Index, stated that Fed members are continuing to resist rate cuts in this year, which is pushing gold lower. He added that gold's inability to hold its previous record high had shaken the confidence of investors.

Gold reached $2,072.19 in early February, just shy from the record high of 2,072.49 set after the financial crisis.

Federal Reserve

The company has hinted at the end of its marathon hike cycle.

However,

U.S. central banks

On Monday, they signaled that interest rates will remain high, and possibly even go higher, due to inflation which may not improve quickly and an economy which is showing only slight signs of weakness.

Gold is a good hedge against inflation but rising interest rates have weakened its appeal.

Simpson said that "hopes of a resolution remain while (debt-ceiling) talks continue. But at the same time, the risk of an U.S. default remains as Democrats and Republicans race against the clock. This has gold in a hold pattern."

Market participants closely followed developments in the Debt Ceiling debate with President Joe Biden, and Republican House of Representatives speaker Kevin McCarthy

Scheduled to meet

The meeting will take place at 3 pm EDT (2000 GMT) on Tuesday.

Investors are also watching the U.S. retail and industrial production numbers for April.

Elsewhere,

Spot silver

The price of gold fell by 0.3%, to $24.04 an ounce.

Platinum

The dollar dropped 0.1%, to $1 063.66,

palladium

The price of $1,531.60 was not much different.