-- Gold prices kept to a tight trading range on Wednesday as markets awaited some progress in negotiations over raising the U.S. debt ceiling, while copper prices hit six-month lows on signs of a slowdown in global manufacturing activity.

Focus was also chiefly on the of the Federal Reserve’s May meeting, due later in the day, for more cues on the path of U.S. interest rates this year. 

Gold has moved in a tight trading band of $1,950-$1,980 an ounce for nearly a week after losing the key $2,000 level, amid continued uncertainty over a U.S. debt default. 

Consistent negotiations between Democrat and Republican lawmakers have so far failed to yield a deal to raise the U.S. spending limit and avoid a default. This comes ahead of a June deadline for a default, which could have dire consequences for the global economy.

was flat at $1,975.63 an ounce, while rose 0.1% to $1,977.45 an ounce by 20:12 ET (00:12 GMT).

But the yellow metal still saw some safe haven bids as traders positioned for a slowdown in global economic activity this year. A raft of weaker-than-expected purchasing managers index readings released on Tuesday furthered this notion, battering industrial metals.

Copper prices sank to a near six-month low after preliminary manufacturing PMI readings from the , and the contracted more than expected in May. The readings indicated a consistent slowdown in global manufacturing activity this year, which is expected to significantly dent copper demand.

The red metal was already nursing steep losses for May after recent data showed an unexpected slowdown in . China is the world’s largest copper importer, and is struggling to shore up economic growth as it reemerges from three years of COVID lockdowns.

rose 0.2% to $3.6452 a pound on Wednesday, hovering around their lowest levels since late-November. 

Broader metal markets were also pressured by a resurgence in the , as traders bet that the Federal Reserve will keep interest rates higher for longer this year.

While the central bank has signaled a potential pause in its rate hike cycle, it is also expected to keep rates at near 15-year highs for the remainder of the year, as inflation remains sticky.

Higher interest rates pressure metal prices by increasing the opportunity cost of holding non-yielding assets. This trend had battered metal prices through 2022, and is expected to keep the pressure on this year.