BY: ONOME AMUGE
Gold prices retreated from its over $2,000 per ounce valuations as risk sentiment welcomed a slight boost following President Vladimir Putin’s recent comments hinting on a progressive dialogue with Ukraine.
Market dealers observed that the development softened the demand for the safe-haven asset that was further pressured by bets on higher U.S. interest rates.
Spot gold shed 1.1 percent to $1,973.80 an ounce, but still settled for a weekly rise of about 0.3% percent, while the U.S. gold futures lost 0.9 percent to $1,981.80 an ounce.
Commenting on gold’s current direction, David Meger, director of metals trading at High Ridge Futures, opines that many positive fundamental factors, like inflation and supply chain disruption still remain favourable for the yellow metal in the long term.
Meger, however, asserted that a good amount of the “positives” might have been priced into the market, adding that the recent moves were a correction off recent highs.
“The market’s obviously pricing in subsequent rate hikes. But the path of those rate hikes is clearly what the market will be focused on, moving forward,” he added.
On his part, Ole Hansen, commodity analyst at Saxo Bank, said the Russia-Ukraine crisis will continue to support the prospect for higher precious metal prices while the market will be tested by inflation and central banks’ rate hike expectations.
Meanwhile, benchmark U.S. 10-year Treasury yield soared, raising the opportunity cost of holding non-yielding bullion, while equities extended gains as concerns over the course of the Ukraine conflict kept investors on their toes.
The week also ended on a bearish note for other precious metals as spot palladium was down 5.6 percent to $2,764.19 per ounce, losing about 7.8 percent in the week, despite hitting a record high earlier in the week, driven by concerns over supply disruption from top-producer Russia.
Silver dropped 0.5 percent to $25.76 per ounce, while platinum lost 0.1 percent to $1,069.80 per ounce.
