Friday, May 20

Gold set for second weekly gain as Ukraine crisis lifts appeal


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Gold prices were set for a second

weekly gain as talks between Russia and Ukraine made little

apparent progress, although bullion saw a dip on Friday as

elevated US Treasury yields on the back of inflation data

asserted its safe-haven appeal.

FUNDAMENTALS

* Spot gold was down 0.2% at $1,992.94 per ounce, as

of 0203 GMT. US gold futures were flat at $2,000.10.

* Bullion gained about 1.2% so far this week.

* There was no breakthrough in the first high-level talks

between foreign ministers from Russia and Ukraine, who met in

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Turkey on Thursday since Moscow invaded its neighbor.

* Benchmark US 10-year Treasury yields rose on Thursday

and topped 2% for the first time in two weeks after US

inflation data confirmed rapidly rising prices, locking in

expectations that the Federal Reserve will raise interest rates

next week.

* Gold is highly sensitive to rising US interest rates,

which increase the opportunity cost of holding non-yielding

bullion.

* Investors took stock of the US inflation data, which was

in line with expectations but also showed the biggest

year-on-year increase since January 1982.

* The European Central Bank took a hawkish turn on Thursday

saying it would end its asset purchases this summer, paving the

way for a rate hike later in the year.

* The US Federal Reserve is scheduled to announce its next

policy statement on March 16.

* Palladium , used by automakers in catalytic

converters to curb emissions, was down 0.5% at $2,914.78 per

ounce. The metal hit a record high of $3,440.76 on Monday,

driven by fears of supply disruptions from top producer Russia.

* Among other metals, spot silver shed 0.7% to $25.70

per ounce, while platinum fell 0.6% to $1,062.01 and was

set for its worst weekly decline since November 2021.

(Reporting by Asha Sistla in Bengaluru; Editing by Sherry

Jacob-Phillips)



financialpost.com