Gold slips from 8-month peak as prospect of Ukraine summit dims appeal

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Gold eased after hitting a more than

eight-month high on Monday, as a plan for the US and Russian

presidents to hold a summit on the Ukraine crisis dented

safe-haven demand, while looming Federal Reserve rate hikes

further pressured the metal.

Spot gold fell 0.3% to $1,891.33 per ounce by 0514

GMT, retreating from a session peak of $1,908.02 – its highest

since June 3. US gold futures were down 0.3% to

$1,894.20.

US President Joe Biden has accepted in principle a summit

with Russia’s Vladimir Putin over the Ukraine crisis, after the

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foreign ministers of the two countries meet next week and if an

The invasion has not occurred, the White House said on Sunday.

“Global investors are deeply concerned about the potential

(conflict) between Russia and Ukraine, and the US president

has been repetitively saying that an invasion is possible in the

days to come,” said Margaret Yang, a strategist at DailyFX.

“On the other hand, investors are also mewling on the Fed

rate hike in March, so that is likely to suppress gold prices.”

Investors are worried over prospects of an aggressive Fed

tightening as inflation runs rampant. At least six Fed officials

are set to speak this week and investors will be keen to find

out their views on a possible 50 basis point hike in March.

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Rising interest rates increase the opportunity cost of

holding non-yielding bullion.

Spot silver fell 0.9% to $23.75 per ounce, platinum

rose 0.2% to $1,069.87.

Auto-catalyst metal palladium dipped 1.6% to

$2,308.23.

“Palladium prices spiked above $2,300/oz due to increased

risk from Russia. Nearly 35% of palladium production comes from

Russia. This saw palladium backwardation widening last month,”

ANZ analysts said in a note.

“Investor interest remains subdued, on expectations of low

chip availability lingering into Q2 2022.”

(Reporting by Asha Sistla in Bengaluru; Editing by Rashmi Aich)