May 16 (Reuters) – Gold prices eased in a narrow range on Tuesday as traders assessed comments from US central bank officials on interest rates staying high, while the US debt-ceiling debate and risk of a default curbed further losses in bullion.
Spot gold fell 0.2% to USD USD 2,015.84 per ounce by 0452 GMT, while US gold futures GCv1 eased 0.1% to USD 2,020.40.
US Fed members are playing down the possibility of rate cuts this year and that is pushing gold slightly lower, said Matt Simpson, a senior market analyst at City Index, adding gold’s failure to hold above the previous record high had shaken confidence.
Gold hit USD 2,072.19 this month, just shy of a record high of USD 2,072.49, after the Federal Reserve hinted that its marathon raising cycle may be ending.
However, US central bankers on Monday signalled they see interest rates staying high and, if anything, going higher, given inflation that may be slow to improve and an economy showing only tentative signs of weakness.
While gold is considered a hedge against inflation, rising interest rates dull the non-yielding bullion’s appeal.
Market participants were also closely following developments in the debt-ceiling debate, with President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy scheduled to meet at 3 p.m. (1900 GMT) on Tuesday for talks.
“Hopes remain of a resolution whilst talks continue, but at the same time the risk of a U.S. default lingers as Democrats and Republicans run down the clock, and that has gold in a holding pattern,” Simpson added.
Meanwhile, India slashed the base import prices of silver, and raised the price of gold, the government said late on Monday.
Elsewhere, spot silver fell 0.4% to USD 24.01 per ounce, platinum ticked 0.1% lower to USD 1,063.76, while palladium was flat at USD 1,532.28.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)