Investing.com -- Gold prices moved little in early trade on Monday as markets awaited more talks between U.S. lawmakers over raising the debt ceiling, with focus also remaining on monetary policy following mixed cues from the Federal Reserve.
President Joe Biden and House Speaker Kevin McCarthy are scheduled to continue talks over avoiding a U.S. default later in the day, after negotiations failed to yield a deal last week. This comes ahead of a mid-June deadline on reaching an agreement, which has kept markets on edge.
But gold saw little safe haven demand over the past week, with prices tumbling sharply below the $2,000 level as a string of hawkish comments from Fed officials saw markets positioning for potentially more interest rate hikes by the central bank.
This was somewhat offset by moderately dovish statements from Fed Chair Jerome Powell, who said given that U.S. credit conditions have tightened substantially this year, the Fed may not have to raise rates as much. His comments sparked a rebound in gold on Friday, although the yellow metal still ended the week nearly 2% lower.
Spot gold steadied around $1,977.80 an ounce in early trade on Monday, while gold futures held at $1,980.50 an ounce by 21:44 ET (01:44 GMT). The yellow metal is now expected to trade rangebound in the coming days, at least until markets receive more cues on the debt ceiling and monetary policy.
More Fed members are set to speak later on Monday, while the minutes of the Fed’s May meeting are due later this week.
Manufacturing activity data for May is also due later this week, and is expected to provide more cues on the world’s largest economy, as growth slows in the face of rising interest rates and high inflation.
Gold is expected to benefit from increased safe haven demand later this year, especially as U.S. economic conditions worsen. Markets are also positioning for a pause in the Fed’s rate hike cycle by June, which could invite more support for the yellow metal.
Other precious metals steadied on Monday after falling over the past week. Platinum futures rose 0.1%, while silver futures shed 0.2%.
Among industrial metals, copper futures slid 0.7% to $3.7060 a pound, and were trading close to a six-month low, following steep losses over the past three weeks.
Signs of a slowing economic rebound in China battered the red metal, as markets positioned for a weaker-than-expected recovery in demand this year. China is the world’s largest importer of copper.