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Gold prices hover near two-month lows

Friday,   26-May-2023   12:56 PM (IST)

Gold prices hovered around two-month lows on Friday and were set for steep weekly losses as concerns over raising the U.S. debt ceiling and expectations of high interest rates saw investors pivot into the dollar. Gold was down about 2% in its worst week since late-January, falling in tandem with a sharp rise in the dollar, which hit a two-month high against a basket of currencies. The losses in gold saw it mark a sharp reversal from record highs hit earlier in May, as easing concerns over an immediate banking crisis sapped the yellow metal of its safe haven appeal. Spot gold fell 0.1% to $1,939.70 an ounce, while gold futures expiring in June fell 0.2% to $1,939.80 an ounce. Both instruments were at their lowest levels in two months, after tumbling below the key $2,000 an ounce level earlier in May. Hawkish signals from the Federal Reserve kept the dollar upbeat, while weighing on gold as policymakers signaled that U.S. interest rates will remain higher for longer to combat sticky inflation. Fears of a global economic slowdown, especially in the face of a U.S. default and a German recession, also did little to spruce up safe haven demand for gold.