Gold prices fell today, Monday, in spot transactions, abandoning the highest level it reached in 3 months, which was recorded in the previous session.
The decline in the yellow metal is strongly influenced by the dollar and bond yields, although losses were limited; Increasing tensions surrounding Ukraine have supported the demand for safe haven.
Gold Prices Today
Spot gold fell 0.23%, to $1,854.56 an ounce.
Spot gold prices have jumped the most since mid-October, and reached their highest level since November 19 at $1,865.15, in the last session.
On the other hand, the price of gold futures contracts – April delivery – increased by 0.74%; equivalent to $13.70 to reach the level of $1,855.80 an ounce.
During the past week, gold prices rose by 1.8%; Inflationary risks and geopolitical tensions have increased the demand for safe assets.
At the same time, the price of silver futures contracts – for March delivery – increased by 1.42%, to record $23.70 an ounce.
The spot platinum price also rose by 0.05% at $1028.38 an ounce, while the spot palladium price decreased by 1.44%, to record the level of $2268.05 an ounce.
US Bonds
Due to the weight of gold, the dollar and safe haven currencies maintained their gains, while 10-year US Treasury yields rose.
Higher yields affected the demand for gold by increasing the opportunity cost of holding the precious metal without interest, while a more stable dollar makes the metal less attractive to buyers abroad.
“Volunteering longs, profit takings that were looking for momentum on Friday and nothing longer started a bit, and there is a bit of a consolidation around these levels,” said Ilya Spivak, currency strategist at DailyFX.
He added, “However, the situation in Ukraine presents a significant risk, as increased political tensions may again lead to lower bond yields, which may be supportive of gold,” Reuters reported.
Political Tensions
The United States said on Sunday that Russia might create a sudden pretext for an attack on Ukraine, but Moscow denied any such plans and accused the West of “hysteria”, even as more than 100,000 troops were massed near Ukraine.
Unless there is an indication of de-escalation, analyst Philip Futures Avtar Sandow said; Momentum on the side of gold prices, with gold speculators eyeing $1,900 an ounce, will be a direct target this week if the White House gets its judgment right on Russian President Vladimir Putin’s intentions.
Source: XglobalMarkets
