Dollar strength and economic concerns limit gold’s shine

Gold prices fell on Friday as the dollar surged, but continued economic worries and the US debt ceiling confrontation curbed the yellow metal’s losses.

At 03:01 GMT, spot gold was down 0.3% to $2010.29 an ounce, in decline of 0.3% during the week. US gold futures fell 0.3% to $2015.00.

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Brian Lan, chief executive officer of Gold Silver Central, said that as investors look to the uncertainties surrounding US debt ceiling talks and expect a pause in US interest rate hikes, there appears to be a small amount of profit-taking leading to lower prices, quoted a Reuters news agency.

Gold rallied on Thursday after data showed an increase in US weekly jobless claims and an annual increase in producer prices last month at their lowest pace in more than two years, but the yellow metal has lost its luster with the rise of the dollar, which makes gold more expensive for overseas buyers.

Meanwhile, a White House spokesman said on Thursday that a meeting scheduled for today on the debt ceiling between President Joe Biden and top lawmakers had been postponed and the two sides agreed to meet next week.

Gold tends to gain during times of economic or financial uncertainty as a safe haven, while low interest rates also increase the demand for unprofitable assets.

Markets now expect a 92.8% probability that the Federal Reserve will keep interest rates at their current level in June.

Elsewhere, silver fell 0.8% in spot transactions to $23.98 an ounce. Platinum fell 1% to $1,083.24.

Palladium rose 0.5% to $1,558.50.

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