The gold fell on Tuesday due to the advance of the dollar and of the returns of the United States Treasury bonds due to expectations of faster rises in interest rates by the Federal Reserve, but bullion remained above the level of 1,830 dollars thanks to the demand for haven assets before the increased tensions over Ukraine.
Spot gold fell 0.3% to $1,837.61 an ounce, while US gold futures fell 0.2% to $1,837.80.
“Even though the Fed will likely announce the start of a rate hike cycle this week, gold is holding up well. Support for the gold metal comes from high inflation and high market volatility. Unless the Fed surprises with an even more aggressive statement, gold (could) remain supported,” said UBS analyst Giovanni Staunovo.
The appetite for risk assets was affected by concerns of Russia invading Ukraine. NATO said on Monday it was putting forces on standby and bolstering eastern Europe with more warships and warplanes.
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The yields of Benchmark 10-year US Treasury bonds They recovered from the lows they hit the day before, while the dollar remained near two-week highs before the start of the Fed’s two-day monetary policy meeting, which will begin later.
The market expects the Fed to signal on Wednesday that it plans raise rates in march and offer an idea of how aggressive you intend to be. Rising interest rates increase the opportunity cost of holding non-interest bearing bullion.
Among other precious metals, silver fell 1.1% to $23.70 an ounce, platinum fell 0.8% to $1,019.43 and palladium gained 1.5% to $2,179. 75.
Source: Reuters
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