Tiny but vital metal markets rush to adjust to Chinese clampdown
A bigger clampdown looks set to have far-reaching ramifications for supply chains feeding American defense and chip-making industries.
The gold price retreated on Tuesday after US economic data and hawkish remarks from Federal Reserve officials drove bets that interest rate cuts may be delayed, though debt default worries are keeping a floor under the safe-haven metal.
Spot gold was down 1.0% to $2,000.32 per ounce by 11:30 a.m. EDT, after falling below the $2,000 level earlier. US gold futures were down 0.8% to $2,005.90 per ounce in New York.
[Click here for an interactive chart of gold prices]
The latest data showed that US retail sales increased less than expected in April, but the underlying trend was solid, driving an uptick in the dollar and Treasury yields.
Meanwhile, Cleveland Fed President Loretta Mester said she does not think the US central bank is at a point yet where it can hold rates steady for a period of time, adding to the hawkish comments from other Fed officials on Monday.
“We needed to see more signs of a pivot from the Federal Reserve and we haven’t really fully seen that yet,” Craig Erlam, a senior market analyst at OANDA, said in a Reuters note.
But overall, “traders are going to remain buying any kind of dip on the gold market as they wait out this debt ceiling fiasco,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago, adding the $2,000 mark remained a key technical support level.
US President Joe Biden and top congressional Republican Kevin McCarthy will sit down later in the day to try to make progress on a deal to raise the debt ceiling and avert an economically catastrophic default.
(With files from Reuters)
