2023.05.2609:49:00UTC+00Gold Gains As Dollar Eases From Two-month High

Gold prices climbed on Friday but were on track for a third weekly loss as aggressive remarks by Federal Reserve officials bolstered the case for a 25-bps rate hike at the June policy meeting.

Spot gold climbed 0.7 percent to $1,953.58 per ounce while U.S. gold futures were up half a percent at $1,953.60.

The dollar eased from a two-month high scaled in the previous session after reports suggested that U.S. lawmakers are inching closer to an agreement that would raise the debt limit for about two years and cap federal spending at the same level as fiscal 2023 for two years.

Uncertainty prevails over the future course of interest rates, with Fed member Christopher Waller saying that the decision on interest rates next month will depend on data released in the next three weeks.

Earlier this week, Minneapolis Fed President Neil Kashkari said interest rates have to rise above 6 percent to bring inflation below the 2 percent target.

Saint Louis Fed President James Bullard indicated the U.S. central bank might need to raised interest rates by another half a percentage point this year.

Trading later in the day may be impacted by U.S. reports on durable goods orders and consumer sentiment.

Market participants also await a report on personal income and spending, which includes a reading on inflation said to be preferred by the Federal Reserve.

U.S. data released on Thursday showed strong GDP growth in the first quarter, while unemployment claims rose less than expected last week.