NEW YORK: Gold prices dipped on Tuesday as yields climbed while talks over raising the US debt limit stretched to another round, but recovered from session lows as the dollar retreated from earlier highs.
Spot gold was down 0.1% at $1,967.03 per ounce by 11:57 a.m. EDT (1557 GMT), after shedding as much as 0.8% earlier.
US gold futures fell 0.4% to $1,969.20.
Gold rose from session lows on reports of further negotiations over raising the debt ceiling, said Daniel Pavilonis, senior market strategist at RJO Futures.
Republicans in the US House of Representatives said they were making little progress in negotiations with the White House over raising the debt ceiling, with the nation facing the risk of default in as soon as nine days.
Wall Street’s main indexes fell and the dollar index backed off from its session high.But “the inverse correlation between yields and gold is still there”, Pavilonis said, expecting gold to pull back as benchmark Treasury yields hovered near their two-month highs.
Bullion has lost more than $100 an ounce from its near-record peak hit earlier this month, mainly pressured by growing bets on interest rates staying higher for longer.
“For now the market has not entirely ruled out another rate hike, and that’s clearly not what (it) was looking (like) just a month ago and that’s leading to this realignment of prices,” said Ole Hansen, head of commodity strategy at Saxo Bank.
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