Gold Price Drops $25 from $2000 as US 'Set to Avoid' Debt Default, Fed 'Bias' to Raise Rates' to 2-Decade High
The GOLD PRICE slipped to new 2-week lows in London trade Wednesday, extending yesterday's steep drop through $2000 per Troy ounce after strong US economic data and comments from Fed policymakers saw the market consensus on interest-rate cuts start to retreat.
Democrat President Joe Biden meantime cut short a visit to Asia for talks at the White House with Republican House Speaker Kevin McCarthy over raising the US federal borrowing limit from the current $34 trillion ceiling to avoid a debt default and government shutdown, likely to start 1 June.
Trading at $1985 around 10.30am UK time today, gold bullion set its first London benchmark below $2000 since May 2nd, snapping a record run of 9 sessions above that level and heading for its cheapest afternoon fixing price since mid-April at $1975 around 3pm.
For US interest rates, "If there's going to be a bias to action, for me it would be a bias to increase a little further as opposed to cut," said non-voting Fed member Raphael Bostic, head of the Atlanta division, on Monday.