Business Standard

Gold set for worst week since November as safe-haven demand eases

'If there is a ceasefire or some sort of a deal, gold could drop fairly quickly,' said Edward Meir, analyst with ED&F Man Capital Markets

Photo: Unsplash/Jingming Pan

Photo: Unsplash/Jingming Pan

Gold was on track for its biggest weekly drop in nearly four months on Friday, after demand for the safe-haven metal was hit by hopes of progress in peace talks between Russia and Ukraine as well as a U.S. interest rate hike.
Spot gold slipped 0.6% to $1,931.90 per ounce, as of 10:30 a.m. ET (1430 GMT) and U.S. gold futures fell 0.6% to $1,930.80, weighed by a stronger dollar.
The dollar jumped 0.4% against its rivals, making bullion more expensive for overseas buyers. [USD/]
"We have seen the invasion-driven momentum and speculative fury (for gold) massively cool off over the past ten days," said David Jones, chief market strategist at
Bullion is down about 2.7% this week as optimism over the peace talks lifted sentiment in wider financial markets this week, denting demand for safe-haven assets. [MKTS/GLOB]
"If there is a ceasefire or some sort of a deal, gold could drop fairly quickly," said Edward Meir, analyst with ED&F Man Capital Markets.
Also adding pressure to bullion, the Federal Reserve raised interest rates by a quarter of a percentage point this week and forecast an aggressive plan to push borrowing costs to restrictive levels next year.
Higher interest rates tend to raise the opportunity cost of holding non-interest paying gold.
However, Standard Chartered analyst Suki Cooper said in a note that the hawkish Fed did not derail the positive sentiment towards gold and that current geopolitical risk had raised inflation concerns, reigniting longer-term interest in gold.
Spot palladium edged up 0.1% to $2,513.35 per ounce, but was set for a weekly fall of more than 10% as fears about supply from top producer Russia eased.
Silver fell 1.2% to $25.02 per ounce, while platinum rose 0.8% to $1,028.83.
(Reporting by Brijesh Patel in Bengaluru; Editing by Amy Caren Daniel)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Mar 18 2022 | 9:42 PM IST

Explore News