Gold prices ease off 3-month peak as US dollar, yields firm

Article content

Gold prices eased on Monday from a

three-month high touched in the previous session, pressured by

stronger US dollar and bonds yields, although losses were

limited as rising tensions surrounding supported Ukraine

safe-haven demand for bullion.

Spot gold was down 0.4% at $1,851.96 per ounce, as of

0436 GMT. In the previous session, prices jumped the most since

mid-October and hit their highest level since Nov. 19 at

$1,865.15.

US gold futures rose 0.6% to $1,852.80.

Weighing on gold, the dollar and safe-haven currencies held

Article content

their gains, while yields on the benchmark US 10-year Treasury

note edged higher.

Higher yields dent the demand for bullion by raising the

opportunity cost of holding non-interest-paying gold, while a

firmer dollar makes the metal less attractive for overseas

buyers.

“Opportunistic longs that were looking for the momentum of

Friday’s move and not anything longer than that are coming off a

bit and there’s a bit of consolidation around these levels,”

said Ilya Spivak, a currency strategist at DailyFX.

However, “the Ukraine situation is a significant risk,

because the extent that it inspires volatility, it may again

drive down bond yields, which would be gold supportive.”

Russia might create a surprise pretext for an attack on

Article content

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.

Unless there is an indication of de-escalation, “momentum

would be on the side of gold prices with gold bulls eyeing

$1,900 an ounce as their immediate target this week if the White

House have got their judgment right about (Russian President

Vladimir) Putin’s intentions,” Phillip Futures analyst Avtar

Sandu said in a note.

Amomg other metals, spot silver edged 0.1% higher to

$23.58 per ounce, while platinum was up 0.4% at $1,031.86

while palladium jumped 2.7% to $2,368.51 per ounce.

(Reporting by Bharat Govind Gautam and Asha Sistla in

Bengaluru; Editing by Sherry Jacob-Phillips)