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Title: Gold Down, but Set for Second Weekly Gain as Ukraine Conflict Continues

Mar 11, 2022 01:01AM ET

By: AnalysisWatch

On Friday morning, gold prices slipped in Asia on Friday morning, while US government bond yields rose on the back of the latest US inflation report. However, it was set for a second weekly rise after talks between Russia and Ukraine made little progress.

By 12:57 p.m. ET, gold futures had risen 0.58 percent to $1,988.75.

Data released on Thursday showed that the US consumer price index (CPI) rose 7.9% year-on-year and 0.8% month-on-month in February. Core CPI rose 0.5% month-on-month and 6.4% year-on-year.

Yields on 10-year US Treasury bonds rose after the US report, which also showed the biggest increase in 40 years. Investors widely expect the US Federal Reserve to raise interest rates when it makes its decision on March 16th.

The European Central Bank kept its interest rate at 0% when it announced its own monetary policy decision on Thursday. However, it unexpectedly accelerated the unwinding of monetary stimulus.

In the Asia-Pacific region, the Bank of Japan will also make a decision next week.

Investors have retreated into safe-haven assets since Russia's invasion of Ukraine on February 24, which boosted the yellow metal. Gold prices have risen as much as 8.5% in the past two weeks and are on track to hit new highs in August 2020.

Spot gold could retest support at $1,976 an ounce, and a break could cause a drop to the $1,924-1,953 range, Reuters technical analyst Wang Tao said.

Palladium, among other precious metals, rose 0.6 percent to $2,945.52 per ounce on Monday. hit a record high of $3,440.76 on Monday on fears of a supply disruption from main producer Russia.

Silver fell 0.8%, while platinum dropped 0.6% to $1,062.51, its worst weekly decline since November 2021.

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