Gold Eases as US Debt Ceiling Deal Hopes Support Dollar

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
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Gold Eases as US Debt Ceiling Deal Hopes Support Dollar

Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk
Ingots of 99.99 percent pure gold are placed in a workroom at Krastsvetmet precious metals plant in the Siberian city of Krasnoyarsk, Russia, January 31, 2023. REUTERS/Alexander Manzyuk

Gold prices fell on Tuesday, pressured by a stronger dollar and upbeat equities, even as talks in Washington to lift the US debt ceiling dragged on.

Spot gold fell 0.3% to $1,963.56 per ounce by 0444 GMT. US gold futures were down 0.6% at $1,965.20.

The dollar index held firm, making greenback-priced gold less attractive for overseas buyers, Reuters said.

"While a debt-ceiling deal has not been reached yet, comments from (House) Speaker (Kevin) McCarthy... reduced safe-haven buying flows into gold," said Tim Waterer, chief market analyst at KCM Trade.

The dollar's momentum, fueled by hawkish comments from Federal Reserve officials, has also been acting as a shackle on gold prices, Waterer said.

US President Joe Biden and Speaker McCarthy could not reach an agreement on Monday on how to raise the $31.4 trillion debt ceiling with just 10 days before a possible default that could sink the economy, but pledged to keep talking.

Keeping gold under pressure, St. Louis Fed President James Bullard said there might be a need to go higher on the policy rate. Rising rates hurt demand for the zero-yielding asset.

However, Michael Langford, director at corporate advisory AirGuide, said key risks for gold appear to be easing as Fed Chair Jerome Powell signaled that it may be time to pause rate rises.

Markets are now pricing in an 84.7% chance of the Fed standing pat on rates next month, the CME FedWatch tool showed.

In the wider financial market, Asian stocks crept to two-week highs, helped by hints of progress towards avoiding a US default and by resilience in Japan's economy, with industrial sector surveys in Europe and the United States in focus later in the day.

Spot silver fell 0.5% to $23.55 per ounce, palladium shed 0.2% to $1,487.67, platinum was steady at $1,067.28.



Euro 2024 Tourism to Bring 1$ Billion to Germany, Study Shows 

The words "Welcome to Berlin" can be read shortly before sunrise on a display in the fan zone (Platz der Republik) against the backdrop of the Reichstag and the TV tower in Berlin on Friday, June 14, 2024. (dpa/AP)
The words "Welcome to Berlin" can be read shortly before sunrise on a display in the fan zone (Platz der Republik) against the backdrop of the Reichstag and the TV tower in Berlin on Friday, June 14, 2024. (dpa/AP)
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Euro 2024 Tourism to Bring 1$ Billion to Germany, Study Shows 

The words "Welcome to Berlin" can be read shortly before sunrise on a display in the fan zone (Platz der Republik) against the backdrop of the Reichstag and the TV tower in Berlin on Friday, June 14, 2024. (dpa/AP)
The words "Welcome to Berlin" can be read shortly before sunrise on a display in the fan zone (Platz der Republik) against the backdrop of the Reichstag and the TV tower in Berlin on Friday, June 14, 2024. (dpa/AP)

Germany, the host of Euro 2024, can expect a 1 billion euro ($1.07 billion) boost to its economy thanks to foreign tourists traveling to the country for the soccer games, the ifo institute forecasts.

This corresponds to about 0.1% of economic output in the second quarter of the year, with Germany´s hospitality and food retail sectors set to benefit the most from the games, the country's top economic research institute said.

"However, the effect is only short-lived, so that exports of services due to returning tourists are likely to fall again after the end of the European Championship in the third quarter and remain the same on balance," ifo researcher Gerome Wolf said.

More than an additional 600,000 foreign tourists and 1.5 million additional overnight stays are expected during the Championship, according to the institute's calculations based on the numbers from the FIFA World Cup hosted by Germany in 2006.

The German Economy Ministry also expects a temporary upturn in consumer-facing sectors after very subdued retail sales this year, but not to the same extent as during the 2006 World Cup.

Experts agree that the overall effect of the Euro 2024 on Europe’s largest economy also depends on how the German national team performs in the tournament.

Their match against Scotland will kick off the tournament on Friday evening.