Gold prices fell Wednesday (16/02) evening from an eight-month high during
the previous volatile session. Easing concerns over Russia's invasion of
Ukraine removed support for the yellow metal from weaker bond yields.
Gold futures edged down 0.11% to $1,854.25 by 12:22 AM ET (5:22 AM GMT).
Prices hit their highest level since June 2021 on Tuesday, before changing
course by closing down nearly 1%.
The US dollar, which usually moves inversely to gold, edged up on Wednesday
while US Treasury yields fell.
Asian stocks rebounded from recent losses, after Russia's announcement that
it would withdraw some of its troops from the border with Ukraine reduced
the potential for armed conflict in the region.
Looking ahead, the dollar is preferred as a haven to gold among core
investors at the moment and could fall again as the Ukraine crisis escalates
further, prompting gold to rally and vice versa, AirGuide Director Michael
Langford told Reuters.
The US Federal Reserve is expected to raise interest rates in March 2022,
with a Reuters poll forecasting a rise of as much as 25 basis points.
However, a growing minority view of members predicts that the central bank
will opt for a more aggressive half-point hike to bring down high inflation
rates.
The Fed will also release the minutes from its last meeting later in the
day.
"Other than the weekly momentum indicator and buying on the 'downside' which
indicates the path of least resistance is higher, most traders expect higher
volatility to be the mainstay of the gold market which will emerge as rumors
and market issues escalate," analyst Phillip Futures said. Avtar Sandu
explained in the notes.
In Asia Pacific, data released earlier in China showed the consumer price
index grew 0.9% year-on-year and 0.4% month-on-month in January. The data
also showed the producer price index rose 9.1% year-on-year.
In other precious metals, silver was down 0.3% by 12:58 AM EDT, while
platinum was up 0.2% and palladium was up 1.5%.
