Gold eases from 3-month highs, palladium investors wary of Russia-Ukraine crisis

Article content

Gold prices fell on Monday as the US

dollar advanced, with worries around the Russia-Ukraine crisis

limiting losses of the safe-haven metal and keeping palladium

traders on tenterhooks.

Spot gold fell 0.3% to $1,855.40 per ounce by 1211

GMT. On Friday, prices jumped the most since mid-October and hit

their highest level since Nov. 19. US gold futures rose

0.8% to $1,857.40.

“Gold had a classic safe-haven jump on Friday… (but) the

problem with safe-haven spikes is that they never really last

Article content

for that long,” said Saxo Bank analyst Ole Hansen.

“At this point, gold is taking a breather waiting for

further news on the geopolitical front.”

Russia might create a surprise pretext for an attack on

Ukraine, the United States said on Sunday. However, Moscow

denies any such plans and has accused the West of “hysteria,”

even as it has more than 100,000 troops massed near Ukraine.

“We also believe that any further escalation of the

situation will determine the Fed from raising interest rates by 50

basis points in March, as this could spark excessive turmoil on

the financial markets,” Commerzbank said in a note.

The dollar gained 0.2%, while benchmark US 10-year

Treasury yields edged higher, raising the opportunity cost of

Article content

holding non-interest-paying gold.

“A modestly stronger dollar is marginally weighing on gold

price today. We expect higher volatility in the near term, with

prices driven by escalation or de-escalation news (on Ukraine),”

UBS analyst Giovanni Staunovo said.

Auto-catalyst metal palladium was steady at $2,306.18

per ounce, having hit an over-two-week peak.

“It looks like the percentage of palladium they (Russia)

export as a percentage of the global production is pretty close

to 50% and that obviously does make the metal extremely exposed

to any temporary reductions in supplies from Russia should the

conflict escalates from current levels,” Hansen added.

Silver rose 0.3% to $23.64 per ounce, while platinum

fell 0.4% to $1,023.22.

(Reporting by Asha Sistla in Bengaluru, additional reporting by

Seher Dareen; Editing by Amy Caren Daniel and Bernadette Baum)