Gold is steady as investors await the outcome of Fed meeting and possible Russia-Ukraine peace talks
16 March 2022 - 07:53
byAsha Sistla
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Bengaluru — Gold held steady on Wednesday, holding near a two-week low hit in the previous session, as investors awaited the outcome from the US Federal Reserve’s two-day policy meeting and potential peace talks between Russia and Ukraine.
Spot gold was little changed at $1,916.86/oz by 4.25am GMT, after touching its lowest since March 1 at $1,906 on Tuesday. US gold futures fell 0.4% to $1,919.50.
“Markets are starting to reflect a bit on what’s going to happen in a post-war situation. Gold is going to lose that main anchor if the peace talks continue. And that’s the war trade, gold shot up as a war hedge and those geopolitical risks fade very quickly,” said Stephen Innes, managing partner at SPI Asset Management.
Ukrainian President Volodymyr Zelensky said on Wednesday that peace talks were sounding more realistic but more time was needed.
US treasury yields rose to their highest in more than two-and-a-half years on Tuesday, ahead of an expected Fed announcement on Wednesday of its first interest rates hike in three years.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.
However, Innes said, “markets have fully priced in seven rate hikes for this year ... high inflation, moderate rise in interest rates — that’s good for gold”.
Spot gold may bounce into a zone of $1,941/oz-$1,960/oz, according to Reuters technical analyst Wang Tao.
Palladium, used by carmakers in catalytic converters to curb emissions, gained 1.2% to $2,453.40/oz, inching away from a more than two-week low hit on Monday over receding supply fears.
Spot silver was up 0.4% to $24.77/oz, while platinum rose 0.9% to $994.66.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Gold hardly changed close to two-week low
Gold is steady as investors await the outcome of Fed meeting and possible Russia-Ukraine peace talks
Bengaluru — Gold held steady on Wednesday, holding near a two-week low hit in the previous session, as investors awaited the outcome from the US Federal Reserve’s two-day policy meeting and potential peace talks between Russia and Ukraine.
Spot gold was little changed at $1,916.86/oz by 4.25am GMT, after touching its lowest since March 1 at $1,906 on Tuesday. US gold futures fell 0.4% to $1,919.50.
“Markets are starting to reflect a bit on what’s going to happen in a post-war situation. Gold is going to lose that main anchor if the peace talks continue. And that’s the war trade, gold shot up as a war hedge and those geopolitical risks fade very quickly,” said Stephen Innes, managing partner at SPI Asset Management.
Ukrainian President Volodymyr Zelensky said on Wednesday that peace talks were sounding more realistic but more time was needed.
US treasury yields rose to their highest in more than two-and-a-half years on Tuesday, ahead of an expected Fed announcement on Wednesday of its first interest rates hike in three years.
Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion.
However, Innes said, “markets have fully priced in seven rate hikes for this year ... high inflation, moderate rise in interest rates — that’s good for gold”.
Spot gold may bounce into a zone of $1,941/oz-$1,960/oz, according to Reuters technical analyst Wang Tao.
Palladium, used by carmakers in catalytic converters to curb emissions, gained 1.2% to $2,453.40/oz, inching away from a more than two-week low hit on Monday over receding supply fears.
Spot silver was up 0.4% to $24.77/oz, while platinum rose 0.9% to $994.66.
Reuters
Asian shares gain ground as investors await Fed decision
World markets slip due to concern in China and Ukraine
Asian stocks slip as investors fret about China’s surging Covid-19 cases
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.
Most Read
Related Articles
JSE could break losing streak on Wednesday as Asian markets recover
Market data — March 15 2022
MARKET WRAP: Rand holds steady as Fed meets
JSE slips on a triple whammy of issues
Published by Arena Holdings and distributed with the Financial Mail on the last Thursday of every month except December and January.