Gold extended losses after posting the biggest decline in 14 months as risk sentiment improved following indications that Ukraine is ready for a diplomatic solution with Russia.

Bullion is paring some of its gains this year as demand for haven assets eases following remarks from a top foreign policy aide to President Volodymyr Zelenskiy on Wednesday. The official said Ukraine is open to discussing Russia’s demand for neutrality as long as it’s given security guarantees – though it won’t surrender a “single inch” of territory. Asian stocks joined a global equities rebound Thursday.

The precious metal and various other commodities such as oil and wheat are coming off their recent highs, although concerns remain over the threat of an inflationary shock to the global economy just as the Federal Reserve prepares to raise interest rates. Investors continue to turn to gold as a store of value, with holdings in bullion-backed exchange-traded funds at the highest in a year, according to initial data compiled by Bloomberg.

“Gold’s correction could also be due to profit-taking ahead of the Fed’s monetary policy meeting next week,” said Madhavi Mehta, a senior analyst at Kotak Securities Ltd. “However, nothing has changed on the geopolitical front, while inflation concerns also remain high, so we may not see a sustained decline. Gold may correct sharply only once there are concrete efforts to resolve the Russia-Ukraine standoff. ”

Spot gold fell 0.8% to $ 1 976.09 an ounce at 12:20 pm in Singapore after dropping 2.9% Wednesday, the most since January 2021. Prices touched $ 2 070.44 on Tuesday, just $ 5 short of an all-time high reached in August 2020. The Bloomberg Dollar Spot Index rose 0.1% after tumbling 0.9% in the previous session.

Palladium fell 1%, while silver and platinum also dropped.

© 2022 Bloomberg

Source link

By admin

Leave a Reply

Your email address will not be published. Required fields are marked *