By Kavya Guduru
(Reuters) – Gold prices edged higher on Monday as the U.S. debt ceiling stalemate and concerns of an economic slowdown steered some traders towards the safe-haven metal.
Spot gold was up 0.2% at $2,014.44 per ounce by 0432 GMT, after falling for three sessions. U.S. gold futures were flat at $2,019.10.
Recent downside surprises in U.S. economic data have lifted the chances of a recession over the next 12 months, with safe-haven flows providing somewhat of a cushion for gold, said Yeap Jun Rong, a market analyst at IG.
Data on Friday showed U.S. consumer sentiment slumped to a six-month low in May on worries that political haggling over raising the federal government’s borrowing cap could trigger a recession.
U.S. President Joe Biden said he expects to meet with congressional leaders on Tuesday for talks on a plan to raise the nation’s debt limit and avoid a catastrophic default.
Bullion tends to gain during times of economic or financial uncertainty, but higher interest rates dim non-yielding gold’s appeal.
“Gold held onto recent gains, with the precious metal trading just below its record high as the market assesses the Fed’s next move,” ANZ said in a note.
Markets are pricing in an 83.4% chance of the U.S. central bank holding rates at the current level in June, according to the CME FedWatch tool.
But taking some shine off gold, rival safe-haven dollar rose to a five-week high against major peers and made bullion less affordable for buyers holding other currencies.
Spot gold might end its bounce around a resistance at $2,031 per ounce, before resuming its fall towards $2,003, according to Reuters technical analyst Wang Tao.
Among other precious metals, spot silver rose 0.4% to $24.01 per ounce, platinum advanced 0.6% to $1,056.19 and palladium was up 0.6% at $1,518.06.
GRAPHIC: xau https://fingfx.thomsonreuters.com/gfx/ce/gkplwzonovb/Pasted%20image%201684116336581.png
(Reporting by Kavya Guduru in Bengaluru; Editing by Sherry Jacob-Phillips, Sohini Goswami and Subhranshu Sahu)
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