Gold Futures Settle Higher As Dollar Turns Weak

Gold prices climbed higher on Friday as the dollar turned weak against most of its major rivals after Fed Chair Jerome Powell signaled a likely pause in interest rate hikes next month.

Meanwhile, Republican negotiators walked out of a meeting over raising the U.S. debt ceiling, offsetting recent optimism about an impending deal.

“Until people are willing to have reasonable conversations about how you can actually move forward and do the right thing, then we’re not gonna sit here and talk to ourselves,” Rep. Garret Graves, R-La., told reporters.

The dollar index dropped to 103.00, losing nearly 0.6%.

Gold futures for June ended higher by $21.80 or about 1.1% at $1,981.60 an ounce.

Silver futures for July ended up $0.427 at $24.060 an ounce, while Copper futures for July settled at $3.7320 per pound, gaining $0.0425.

Powell gave a clear signal he is inclined to pausing interest rate increases next month and said that tighter credit conditions could mean the policy peak will be lower.

“We’ve come a long way in policy tightening and the stance of policy is restrictive and we face uncertainty about the lagged effects of our tightening so far and about the extent of credit tightening from recent banking stresses,” Powell told a Fed conference Friday in Washington.

“Having come this far, we can afford to look at the data and the evolving outlook to make careful assessments,” he said, reading from prepared notes.

“Gold got a boost from Friday’s headlines of a potential June Fed hold, debt ceiling drama, and further banking rescues,” says Edward Moya, Senior Market Analyst at OANDA. “Gold remains a favorite safe-haven trade and if debt ceiling talks continue to struggle, prices could easily stabilize above the $2000 level next week.”

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