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  • Writer's pictureanalysiswatch

Title: Gold Down, Cooling Ukraine Tensions Negate Support from Weaker Bond Yields

Feb 16, 2022 12:27 AM ET

By: AnalysisWatch

Gold fell in Asia on Wednesday morning from an eight-month high reached during the previous volatile session. Weaker bond yields for yellow metal negated yellow metal support.

Gold futures were down 0.11% to $1,854.25 by 12:22 p.m. EDT. They reached their highest level since June 2021 on Tuesday before reversing course to close nearly 1% lower. The dollar, which usually moves inversely to gold, moved higher on Wednesday while U.S. Treasury yields fell.

Asian stocks rebounded from recent losses thanks to Russia's announcement that it would withdraw some troops from its border with Ukraine, dispelling rumors of armed conflict in the region.

Going forward, the harder-to-represent dollar is the preferred safe haven against gold among key investors, which could fall in the event of further de-escalation of the Ukraine crisis, triggering a rally in gold and vice versa, AirGuide CEO Michael Langford told Reuters.

The U.S. Federal Reserve is widely expected to raise interest rates in March 2022, with a Reuters poll predicting a 25 basis point increase. A growing minority, however, predicts the central bank will opt for a more aggressive half-percentage point hike to cool high inflation.

The Federal Reserve will also release the minutes of its latest meeting later in the day.

In Asia-Pacific, data released earlier in the day in China showed that the consumer price index rose 0.9% year-on-year and 0.4% month-on-month in January. The data also showed that the producer price index rose 9.1% year-on-year.

As for other precious metals, silver fell 0.1%, while platinum rose 0.2% and palladium jumped 2.7%.

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