Gold prices reversed course and slid nearly 1%. Russia's invasion of Ukraine triggered sharp swings in the precious metals market this week.
Friday (25/2), spot gold price closed down 0.8% to US$ 1,889.34 per troi ounce. Throughout the session, gold has been moving between gains and losses.
Meanwhile, the price of gold futures for delivery in April 2022 also fell 2% to US$ 1,887.60 per troi ounce.
"We think the price drop is premature, there is a risk of further escalation in the conflict and it could be just a temporary correction," said Commerzbank analyst Daniel Briesemann.
Some market participants believe the sanctions imposed by the West on Russia are not harsh enough, Briesemann added.
The price of this safe-haven metal rose more than 3% to US$ 1,973.96 in the last session after Russia attacked Ukraine. However, in the end, the gold price fell by almost US$ 90 from its highest level.
"The dramatic rise followed by a dramatic decline was very technically motivated," said David Meger, Director of Metals Trading High Ridge Futures.
The rebound in global stock markets also weighed on the safe-haven metal, even as analysts expect market volatility to remain high.
"The risk premium and safe-haven demand will continue to support gold, but gains were limited by the possibility of a rate hike by the US Federal Reserve taking place this March," said Xaio Fu, Head of Commodities Markets Strategy at Bank of China International.
In this trade, the price of palladium also fell 1.3% to US $ 2,372.19 per troi ounce. Palladium briefly touched US $ 2,711.18 per troy ounce on Thursday, which is the highest level since July.
"Palladium is the precious metal most vulnerable to a Russian invasion of Ukraine," said Carlo Alberto De Casa, External Market Analyst at Kinesis.
With Russia being the biggest producer of palladium, the possibility of tightening sanctions against the country and its companies increases the prospect of a supply shortage pushing up prices, De Casa added.
