By Deep Kaushik Vakil
(Reuters) – Gold turned positive on Friday, reversing course from earlier in the session as buyers took advantage of a price dip, while economic risks including looming worries about U.S. debt default kept bullion’s safe haven demand intact.
Spot gold edged up 0.1% at $2,018.29 per ounce by 10:10 a.m. EDT (1410 GMT), after dipping as much as 0.7% earlier in the session.
U.S. gold futures rose 0.2% to $2,023.40.
“Gold’s got some footing here this morning on some people stepping in to buy after the dip,” said Bob Haberkorn, senior market strategist at RJO Futures.
Gold ended lower in the previous two sessions as rival safe-haven dollar climbed to a one-week high, making bullion less attractive for buyers holding other currencies. [USD/]
However, “the upside is limited for dollar strengthening due to the debt ceiling issues that we will be going through for the next couple of weeks, where gold will benefit if that lingers on,” Haberkorn added.
Treasury Secretary Janet Yellen said there was still uncertainty about exactly when Treasury would run out of cash to pay U.S. government debts, which could come as early as June 1.
Safe-haven bullion tends to gain during times of economic or financial uncertainty.
The bullish sentiment in the gold market still stands strong over expectations of the Fed cutting rates later this year, said Lukman Otunuga, a senior research analyst at FXTM, adding that traders have practically priced in a 25-basis-point cut by September.
Fed Governor Michelle Bowman, however, reiterated the central bank’s stance on raising rates if necessary to fight still-high inflation.
Spot silver fell 0.1% to $24.14 per ounce, plunging 6% for its worst week in seven months.
Fawad Razaqzada, market analyst at City Index, attributed the drop to the dollar rebound and concerns over China’s economic recovery.
Platinum dropped 1.8% to $1,074.33, while palladium lost 1.6% to $1,526.94, but both were set for weekly gains.
(Reporting by Deep Vakil and Seher Dareen in Bengaluru; Editing by Sonia Cheema, Subhranshu Sahu and Shailesh Kuber)
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