2023.05.1710:15:00UTC+00Gold Hovers Below $2,000 Per Ounce Amid Dollar Strength

Gold prices edged lower on Wednesday and the dollar traded firm as hawkish comments from Federal Reserve officials bolstered the chance of a 25-bps rate hike at the June FOMC meeting. The dollar has also benefited from uncertainty over U.S. debt ceiling negotiations.

Spot gold eased 0.2 percent to $1,985.76 per ounce, while U.S. gold futures were down 0.2 percent at $1,989.15.

Cleveland Fed President Loretta Mester said on Tuesday that she doesn't think the central bank can hold interest rates steady yet.

However, comments from Chicago Fed President Austan Goolsbee and Atlanta Fed President Raphael Bostic suggested they were leaning toward holding interest rates steady at the central bank's June 13-14 meeting.

Dallas Fed President Lorie Logan noted that a slower pace of tightening doesn't diminish commitment to achieving inflation goals.

New York Fed President John Williams indicated he was comfortable with current market expectations of no increase at the June meeting.

Meanwhile, U.S. debt limit talks shifted into an encouraging phase. President Joe Biden cut short his planned Asia trip to return to Washington and House Speaker Kevin McCarthy offered a somewhat upbeat assessment on the second round of debt-ceiling talks, suggesting that an agreement is possible by the end of the week.

In economic releases, Eurozone inflation accelerated to 7.0 percent in April from 6.9 percent a month earlier, as rising services and energy costs offset a slowdown in food price growth, Eurostat said earlier in the day, confirming preliminary data.

U.S. building permits and housing starts figures for April may influence trading in the New York session.