Gold prices remain stable in early trade

12 May 2023 , 12:39 PM

As investors evaluated recent American statistics that indicated a weakening economy and its implications for the Federal Reserve's interest rate trajectory, gold prices remained stable in early Asian trade on Friday.

Spot gold remained steady at $2,016.86 per ounce after closing lower the previous day. U.S. gold futures increased by 0.1% to $2,021.80.

On Thursday, gold prices increased as statistics revealed a rise in weekly jobless claims and the weakest annual gain in producer prices in more than two years last month. but lost its appeal as the U.S. dollar gained strength and made buying bullion from abroad more expensive.

The leaders decided to meet early next week instead of the previously scheduled Friday meeting on the debt ceiling between U.S. President Joe Biden and top lawmakers, a White House official said on Thursday.

The Federal Deposit Insurance Corporation announced on Thursday that the majority of the cost of replacing a deposit insurance fund that was depleted of $16 billion by the failure of Silicon Valley Bank and two other lenders will be borne by large U.S. lenders. However, mid-sized banks will also be on the hook.

Markets presently assign an 89.9% probability that the Federal Reserve will maintain current interest rates in June.

When there is financial or economic instability, safe-haven assets like gold tend to do well, and lower interest rates also increase the allure of zero-yield assets.

The largest gold-backed exchange-traded fund in the world, SPDR Gold Trust GLD, reported that its holdings decreased 0.12% to 937.84 tonnes on Thursday from 938.99 tonnes on Wednesday.

Spot silver remained unchanged at $24.17 per ounce, while palladium increased by 0.2% to $1,554.63 and platinum decreased by 0.2% to $1,091.13.

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