Mining News

Gold price tapers off on looming US rate hike, Ukraine peace talks

Gold prices continued to slide on Wednesday as the market braces for an imminent US interest rate hike that will likely be confirmed by the Federal Reserve’s policy statement in the afternoon.

The metal’s safe-haven appeal was also dimmed by hopes of progress in Russia-Ukraine talks. Earlier, Ukrainian President Volodymyr Zelensky said peace talks were sounding more realistic, even as Russia’s invasion continued.

Spot gold fell 0.4% to $1,909.26 an ounce by 1:00 p.m. ET, its lowest in over two weeks. US gold futures dropped 0.9% to $1,911.60 an ounce in New York.

[Click here for an interactive chart of gold prices]

Meanwhile, benchmark 10-year US treasury yields are approaching the highest in almost three years, placing further pressure on bullion. Wall Street’s main indexes also jumped on Wednesday, led by gains in technology and financial stocks.

“Everybody is anticipating the Federal Reserve verdict this afternoon and the big question is, whether it is a quarter-point or half-point rate hike,” Bob Haberkorn, senior market strategist at RJO Futures, commented in a Reuters update.

“Stocks have been resilient this morning and bouncing back, so there is a risk-on sentiment in the market, and gold, being a safety asset, is lower for the time being,” he added.

“Some positive news reports on the Russia-Ukraine war front and the recent big drop in crude oil prices are lifting marketplace sentiment,” Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

(With files from Reuters)

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