Gold hardly changed close to two-week low

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