Gold gains if dollar falls due to Fed rate hike; Focus on Ukraine

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Gold prices rose on Thursday

Dollar weakened after expected rate hikes by the

US Federal Reserve, with floating investor focus

Peace talks between Russia and Ukraine.

Spot gold rose 0.2% to $1,931.80 an ounce

0619 GMT after hitting its lowest level since February 28 at $1,894.70

On Wednesday. US gold futures rose 1.2% to $1,931.90.

“The sharp decline in the US dollar was the main reason for this

the gold rally, aided by a stupid reaction from US cross-country runners

yielding to the FOMC decision and outlook,” OANDA Senior Analyst

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Jeffrey Halley said in a note.

The dollar index weakened, making gold less expensive

other currency holders after the US Federal Reserve moved to a

tightening monetary policy but without a tougher delivery

Surprise, which may have contributed to his week-long momentum.

The Fed’s decision pushed up US 10-year Treasury yields

to the highest level since May 2019 last year

Meeting.

Gold in the greenback price is very sensitive to rising US prices

Interest rates as they increase the opportunity cost of holding

unyielding bullion.

“The move in dollars and stocks has been much more aggressive than

the move to gold. And that’s probably Ukraine risks yet

linger where there is still no all-clear,” said Ilya Spivak,

a currency strategist at DailyFX.

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Ukrainian President Volodymyr Zelenskyy said negotiations

“More realistic” were becoming more and more proposals made to Russia

Discussion are “close to an agreement”.

Holdings of the world’s largest gold-backed exchange traded

Fund, SPDR Gold Trust, rose 0.8% to 1,070.53 tonnes on Wednesday

– the highest level since March 2021.

Palladium, used by automakers in catalytic converters

to curb emissions rose 2.5% to $2,470.17 an ounce.

The autocatalyst metal hit a record high of $3,440.76

March 7, buoyed by fears of supply disruptions from the top producer

Russia.

Spot silver rose 0.4% to $25.16 an ounce, during

Platinum fell 0.3% to $1,014.90.

(Reporting by Asha Sistla in Bengaluru; Editing by Uttaresh.V

and Sherry Jacob Phillips)