Gold prices eased in a narrow range on Tuesday as traders assessed comments from US central bank officials on interest rates staying high, while the US debt-ceiling debate and risk of a default curbed further losses in bullion.

Spot gold fell 0.2% to $2,016.72 per ounce by 0237 GMT, while US gold futures were down 0.1% to $2,020.20.

Fed members continue to push back on rate cuts this year and that is pushing gold slightly lower, said Matt Simpson, a senior market analyst at City Index, adding gold’s failure to hold above the previous record high has shaken confidence.

Gold gains on dollar pullback, debt-ceiling talks in focus

Gold hit $2,072.19 earlier this month, just shy of a record high of $2,072.49, after the Federal Reserve hinted that its marathon hiking cycle may be ending.

However, US central bankers on Monday signalled they see interest rates staying high and, if anything, going higher, given inflation that may be slow to improve and an economy showing only tentative signs of weakness.

While gold is considered a hedge against inflation, rising interest rates dull the non-yielding bullion’s appeal.

“Hopes remain of a resolution whilst (debt ceiling) talks continue, but at the same time the risk of a US default lingers as Democrats and Republicans run down the clock, and that has gold in a holding pattern,” Simpson added.

Market participants were closely following developments in the debt ceiling debate, with President Joe Biden and Republican House of Representatives Speaker Kevin McCarthy scheduled to meet at 3 p.m. EDT (1900 GMT) Tuesday for talks.

Also on investors’ radar were US retail sales and industrial production data for April.

Elsewhere, spot silver fell 0.3% to $24.04 per ounce, platinum dipped 0.1% to $1,063.66, while palladium was little changed at $1,531.60.