Gold price up on doubts over Ukraine ceasefire
Gold prices rebounded on Wednesday amid doubts over the possibility of a ceasefire between Russia and Ukraine. A retreat in dollar also helped to bolster the precious metal’s appeal.
Spot gold rose 0.7% to $1,933.31 per ounce by 12:40 p.m. ET, returning to levels seen earlier in the week. US gold futures gained 1.0% to trade at $1,937.80 per ounce.
Meanwhile, the US dollar fell 0.5% to nearly a two-week low, making gold less expensive for other currency holders.
“Also helping gold is this Russian situation, which seemed to be improving yesterday is now kind of deteriorating again,” Edward Meir, an analyst with ED&F Man Capital Markets, told Reuters.
On Wednesday, the Kremlin welcomed that Kyiv had set out its demands for an end to the conflict in Ukraine in written form, but said there was no sign of a breakthrough yet.
Bullion had dropped as much as 1.8% in the previous session after Russia pledged to cut down on military operations around Kyiv and in northern Ukraine, a development that curbed demand for safe havens.
Markets are also keeping a close tab on the US Treasury yield curves, which briefly inverted on Tuesday, as bond investors bet that aggressive tightening by the Federal Reserve to fight soaring inflation could hurt the economy.
“A strong bounceback in crude oil prices from this week’s low is also a bullish element for the metals markets, as well as the rest of the raw commodity sector,” Jim Wyckoff, senior analyst at Kitco Metals, said in a note.
