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Gold slips on Ukraine peace talks, looming Fed rate hike

Economy Mar 16, 2022 12:42PM ET
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© Reuters. FILE PHOTO: Granules of gold and silver are seen in glass jars at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk
 
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By Brijesh Patel

(Reuters) - Gold fell to more than a two-week low on Wednesday as the safe-haven appeal of the metal was dimmed by hopes of progress in Russia-Ukraine talks, with rising bond yields adding pressure to bullion as markets braced for a U.S. interest rate hike.

Spot gold was down 0.4% to $1,909.41 per ounce at 12:15 p.m. EDT (1615 GMT), after touching its lowest level since March 1 at $1,903.59 earlier in the session.

U.S. gold futures fell 0.9% to $1,912.40.

"Everybody is anticipating the Federal Reserve verdict this afternoon and the big question is, whether it is a quarter-point or half-point rate hike," said Bob Haberkorn, senior market strategist at RJO Futures.

"Stocks have been resilient this morning and bouncing back, so there is a risk-on sentiment in the market, and gold, being a safety asset, is lower for the time being."

Wall Street's main indexes jumped on Wednesday, led by gains in technology and financial stocks.

The Fed policy statement and quarterly economic projections, due at 2 p.m. EDT (1800 GMT), will be followed by Fed Chair Jerome Powell's news conference. Traders are pricing in an increase in the U.S. central bank's benchmark overnight interest rate of at least 25 basis points.

Benchmark 10-year U.S. Treasury yields hit almost three-year highs. Gold is highly sensitive to rising U.S. interest rates, and consequently higher yields increase the opportunity cost of holding non-yielding bullion.

Ukrainian President Volodymyr Zelenskiy said peace talks were sounding more realistic, even as Russia's invasion continued, but that more time was needed.

"Some positive news reports on the Russia-Ukraine war front and the recent big drop in crude oil prices are lifting marketplace sentiment," Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Spot silver fell 0.9% to $24.64 per ounce, while platinum rose 2.5% to $1,010.80.

Palladium edged 0.7% lower to $2,407.84 per ounce amid receding supply fears.

Gold slips on Ukraine peace talks, looming Fed rate hike
 

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Comments (4)
Arthur Timmins
Arthur Timmins Mar 16, 2022 12:57PM ET
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Nothing wrong with the article. Everyonevis a critic.. The article gives good dtats....
Shovan Ghosh
Shovan Ghosh Mar 16, 2022 10:51AM ET
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do not confuse people you are predicting what would be the scenario for next month or so???? if you are an expert and you know the chart then predict for this week or next week your target price never matched................
Arthur Timmins
Arthur Timmins Mar 16, 2022 10:51AM ET
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Nothing erong with the article. Everyonevis a critic.. The article goves good dtats...
Shovan Ghosh
Shovan Ghosh Mar 16, 2022 10:51AM ET
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do not confuse people you are predicting what would be the scenario for next month or so???? if you are an expert and you know the chart then predict for this week or next week your target price never matched................
Shovan Ghosh
Shovan Ghosh Mar 16, 2022 10:50AM ET
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do not confuse people you are predicting what would be the scenario for next month or so???? pathetuc if you are ab expert and you know the chart then predict for this week or next week your target price never matched................
 
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