Gold prices fell today, Monday, after hitting their highest level in more than 8 months, at the beginning of the week’s trading.
The plan of the US and Russian presidents to hold a summit on the Ukraine crisis led to a decline in the demand for safe haven, while looming further increases in federal interest rates, which put pressure on the metal.
Gold prices ended their trading last week, dropping to less than $1,900 an ounce, but recorded weekly gains of more than 3%.
Gold Prices Today
The price of gold futures contracts – April delivery – decreased by 0.25%; equivalent to $4.80, to reach the level of $1,895 an ounce.
The yellow metal had gained 3.1%, during the past week, after touching its highest level in 8 months at 1905 dollars.
The spot price for the yellow metal fell by 0.08%, to $1,896.68 an ounce, retreating from the session peak of $1,908.02, the highest since June 3.
At the same time, the price of silver futures contracts – for March delivery – decreased by 0.42%, recording $23.80 an ounce.
While the spot platinum price rose more than 1.13% at $1077.08 an ounce, while the spot palladium price increased by 0.86%, to record $2,360.42 an ounce.
“Palladium prices have risen above $2,300 an ounce due to increased risks from Russia, with nearly 35% of palladium production coming from Russia, and this has widened palladium’s decline last month,” ANZ analysts said in a note.
He added, “Investor interest remains weak, with expectations of lower chip availability in the second quarter of 2022.”
Biden And Putin Summit
The White House said on Sunday that US President Joe Biden has agreed in principle to hold a summit with Russian Vladimir Putin on the Ukraine crisis, after the two countries’ foreign ministers meet next week and if there is no invasion.
“Global investors are deeply concerned about a potential conflict between Russia and Ukraine, as the US president has repeatedly said that an invasion is possible in the coming days,” said DailyFX strategist Margaret Yang.
“On the other hand, investors are also crying about the Fed rate hike in March, so it is likely that this will lead to a decline in gold prices,” she added.
US Fed Moves
Investors are worried about the prospects of a US Federal Reserve tightening as inflation spreads; At least 6 Fed officials are scheduled to speak this week and investors will be keen to know their views on a possible 50bp increase in March.
Higher interest rates increase the opportunity cost of holding non-yielding bullion.