Gold Prices Mixed On Growth, US Debt Ceiling Worries

Gold prices traded mixed on Thursday and the dollar traded firm amid lingering concerns surrounding the U.S. debt ceiling and escalating signs of economic malaise in Europe.

Minutes from the Federal Reserve's May meeting showed officials were split over the need for rate rises - adding to uncertainty about the Fed's monetary policy path.

Spot gold edged up 0.2 percent to $1,960.95 per ounce, while U.S. gold futures were down 0.2 percent at $1,961.75.

The dollar hit a two-month high against the euro and a six-month peak versus the yen as investors fretted about a lack of progress towards increasing the U.S. debt ceiling limit.

U.S. House Speaker Kevin McCarthy, R-Calif., told reporters the two sides remain "far apart," with ongoing talks hitting a snag over Republicans' demand for spending cuts.

With just over a week left - including a holiday weekend - U.S. Treasury Secretary Janet Yellen reiterated her dire warning that the U.S. could have a hard time paying its bills.

Fitch Ratings placed the United States "AAA" credit on "rating watch negative," signaling downside risks to U.S. creditworthiness.

Growth concerns also resurfaced after official data showed German economy entered a technical recession in the first quarter of this year.

GDP declined a seasonally and calendar adjusted 0.3 percent from the fourth quarter of last year as household consumption slumped amid the rising cost of living that is fueled by high inflation, revised data from the statistical office Destatis showed.

"After growth entered negative territory at the end of 2022, the German economy has now recorded two consecutive negative quarters," Destatis President Ruth Brand said.

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