Gold stays below $2,000, but off critical low that suggests bear moment

Investing.com -- The gold bull is still intact — somewhat.

Both gold futures and the spot price of bullion remained below the key $2,000 an ounce mark on Wednesday as the Biden administration expressed optimism that the White House might have a higher debt ceiling deal by the weekend from its negotiations with rival Republicans in Congress. Gold is viewed as a hedge against economic and political troubles.

The Dollar Index and the yield on the 10-year U.S. Treasury note were up too, pressuring gold further.

Despite the negative sentiment prevailing over gold for a second day after its first tumble below $2,000 in two weeks, the yellow metal steered clear of breaking the $1,975 support which technical analysts said would be critical for restoring its upside momentum.

“If it gets below $1,975, the way would be open for $1,965 and $1,942 even,” said Sunil Kumar Dixit, chief technical strategist at SKCharting.com. “So long as it stays above that level, there’s a chance of it returning to $2,000 in the not-too-distant future.”

Gold for June delivery on New York’s Comex settled at $1,984.90 an ounce, down $8.10 or 0.5%, after a session low at $1,978.35. On Tuesday, June gold fell $29.70, or 1.5%. The benchmark gold futures contract hit 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 $1,983.49 by 13:40 ET (17:40 GMT), down $5.46, or 0.3%. Spot gold hit a record high of $2,073.29 earlier this month, according to Investing.com data.