© Reuters. FILE PHOTO: An employee processes ingots of 99.99 percent pure gold at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk
By Bharat Gautam
(Reuters) – Gold prices edged up on Monday as fighting in Ukraine buoyed demand for the safe-haven asset, although strength in U.S. bond yields restricted bullion’s gains.
XAU= was up 0.14 % to $1,923.83 per ounce by 1227 GMT. U.S. GCv1 eased 0.2% to $1,925.20.
“We are treading water. The risk is more to the downside than to the upside at the moment, we will have to wait and see,” said Michael Hewson, chief market analyst at CMC Markets UK.
However, Hewson added, there is support for gold prices around last week’s lows of near $1,890, which could help gold move towards $1,940-$1,950.
Equities slipped as fighting in Ukraine raged on with no sign of a ceasefire even as diplomatic efforts continued. MKTS/GLOB
However, the benchmark U.S. 10-year yield was up at around 2.2%, increasing the opportunity cost of holding non-interest bearing gold. US/
Last week, gold prices lost more than 3%, their biggest weekly percentage drop since mid-June as optimism over the Russia-Ukraine peace talks and a U.S. interest rate hike dented demand for the metal.
Atlanta Fed President Raphael Bostic said on Monday he has pencilled in a total of six interest rate hikes this year and two for 2023, fewer than most of his colleagues, on worries about the effects of Russia’s invasion on the U.S. economy.
“Gold now looks to have seen its bullish surge fade for the time being,” Rupert Rowling, market analyst at Kinesis Money, said in a note.
Gold is seeing pressure from the Russia-Ukraine talks, which are slowing the rush to safe-havens, and as interest rate hikes by the Federal Reserve and the Bank of England confirm the hawkish trajectory central banks globally are adopting to tackle inflation, the note said.
Among other precious metals, spot silver rose 0.1% to $24.98, platinum was up 0.2% to $1,023.52, while palladium fell 0.7% to $2,472.45 per ounce.
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