Gold stabilizes near lowest level since early May

Gold prices finished at their lowest level in more than a month today, May 17, hurt by an uptick in the US dollar as US debt ceiling negotiations continued to loom.

Upbeat remarks from President Joe Biden, earlier today, played down prospects for an unprecedented and potentially catastrophic debt default, which, in turn, weighed on bullion's appeal. The top leader also noted that yesterday's meeting with senior Congressional leaders was fruitful.

Elsewhere, in a conference hosted by the Central Bank of Brazil, IMF First Deputy Managing Director Gita Gopinat said she is “worried that price pressures seem entrenched in many economies and that upside inflation risks are sizeable.”

"Central banks must remain resolute in keeping policies tight and recognize that insufficient monetary tightening now may necessitate even more painful actions down the road," she was quoted as saying.

A Reuters survey showed that more than 60% of economists polled by the news agency believe the Federal Reserve will fix interest rates at the current 5% to 5.25% range until year-end.

All eyes are on the release of US jobless claims data tomorrow, May 18, ahead of Fed Chair Jerome Powell's speech the following day. His statements provide clues on the course of monetary policy during the coming period.

In terms of trading, bullion for June delivery plunged by 0.40%, or $8.10, to end at $1,984.90 an ounce — the lowest since the end of last March.

Meanwhile, the US dollar index, which gauges the greenback's strength against a basket of six currencies, surged 0.20% to 102.80 points at 8:41 pm Makkah time, after touching a seven-week high of 103.11 points in early trading.