Gold buoyed by banking system stresses
Market awaits U.S. GDP and jobs data
U.S. debt ceiling decision raises riskaversion analyst

April 27 Reuters Prices of safehaven gold rose on Thursday as economic worries returned to the fore and traders awaited U.S. data for hints on the Federal Reserve39;s policy trajectory.

Spot gold was up 0.6 at 2,000.43 an ounce by 1024 GMT and U.S. gold futures rose 0.6 to 2,007.60.

Continued stresses in the banking system are helping gold prices, said StoneX analyst Rhona O39;Conell, adding that a decision to raise the U.S. debt ceiling has also created riskaversion in the market.

U.S. government officials are so far unwilling to intervene in the First Republic Bank39;s rescue process and the U.S. House of Representatives on Wednesday passed a bill to raise the government39;s 31.4 trillion debt ceiling.

All the current elements of uncertainty are supportive for gold. If they are resolved then a record high for gold is not in sight. But bank stresses do tend to linger and that points to fresh highs, O39;Conell added.

Bullion scaled a more than oneyear peak at 2,048.71 in midApril as the U.S. banking crisis unfolded.

Markets are mostly expecting the U.S. central bank to raise interest rates by 25 basis points at its May 23 meeting.

Firmer interest rates work against gold because it is not an interestbearing asset; but on the flip side, higher rates can work in gold39;s favour because they increase the chance of another banking…