Gold prices firmed on Tuesday as
Russia-Ukraine concerns kept the safe-haven metal supported near
the previous session’s over one-week high, while markets await
US inflation data that is crucial for the Federal Reserve’s
Spot gold was steady at $1,819.71 per ounce, by 0614
GMT, having risen to the highest level since Jan. 26 on Monday.
US gold futures dipped 0.1% to $1,820.40.
“Geopolitical tensions surrounding Russia and Ukraine are
pushing gold prices higher. Besides, investors are waiting for
Thursday’s US inflation data,” said Margaret Yang, a
strategist at DailyFX, adding that January inflation is
projected to rise higher than December levels.
According to a Reuters poll, the US consumer price index
for January is expected at an annual rise of 7.3%, which would
be the largest such increase since 1982.
“US CPI will be the major risk to gold this week. A high
print would probably be quite bearish as traders place higher
odds on Fed tightening,” said IG Markets analyst Kyle Rodda.
The expected 7.3% rise in CPI is a high bar to meet, “so if
it undershoots, gold could get a run-on,” Rodda added.
Limiting gold’s gains, the benchmark 10-year US Treasuries
firmed near their highest levels in more than two years.
Gold is considered a hedge against inflation and
geopolitical risks, yet rate hikes would raise the opportunity
cost of holding non-yielding bullion.
If Russia invades Ukraine, US President Joe Biden said on
Monday that the Nord Stream 2 gas pipeline would be halted while
British Prime Minister Boris Johnson said sanctions and other
measures will be ready.
Demand for safe-haven assets such as gold has helped offset
pressure from expectations of faster US rate hikes this year,
Silver fell 0.56 % to $22.86, platinum was
down 0.5% at $1,015.20, and palladium fell 0.2% to
(Reporting by Seher Dareen in Bengaluru; additional reporting
by Swati Verma; Editing by Shailesh Kuber and Sherry