Investing.com -- Don’t count out the gold bull yet.
After a persistent slide since mid-May, bullion traded on the spot market and gold futures on New York’s Comex hit two-week highs Tuesday amid fresh tensions over whether the U.S. debt ceiling deal between the White House and rival Republicans will get through Congress.
“It won’t take a lot to disrupt this debt deal as optimism remains that Congress won’t mess with putting the economy at risk of an unnecessary catastrophe,” said Ed Moya, analyst at online trading platform OANDA.
But he acknowledged media headlines that quoted a few Republicans in the House of Representatives as opposing the deal cut by Speaker Kevin McCarthy with President Joe Biden, even as the party’s leadership seemed bent on averting a default on U.S. debt
“A complete collapse in confidence that comes with a U.S. default would trigger a de-risking moment that would take down everything including gold,” added Moya.
The front-month gold contract on New York’s Comex settled Tuesday’s session at $1,968.10 an ounce, up $14.10, or 0.7%, on the day. The benchmark gold futures hit a two-week high of $1,981.85 earlier. Just in the previous session, it hit a nine-week low of $1,958.10 after hitting an all-time high of $2,085.40 on May 4.
The spot price of gold, which reflects physical trades in bullion and is more closely followed than futures by some traders, was at $1,958.49 by 14:45 ET (18:45 GMT). Spot gold hit a two-week high of $1,963.54 earlier, after a record high of $2,073.29 earlier this month, according to Investing.com data.
“Gold shows strong rebound, with a significant rally of more than $30 from support areas,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com.
“The support now shifts to $1,945, above which further recovery towards $1,975 is likely to be witnessed during upcoming sessions. However, for gold's resumption of the uptrend, $1,975 must be established on a day’s closing basis, failing which, bearish correction remains intact.”