Mar 23, 2022 01:10AM ET
By: AnalysisWatch
Gold prices were down in Asia on Wednesday morning, holding steady as the ongoing war in Ukraine supported demand for the yellow safe-haven metal. However, the US Federal Reserve's call to raise interest rates weighed on market sentiment.
Gold futures were down 0.02% at $1,921.20 by 1:06 AM ET.
St. Louis Fed President James Bullard urged the central bank to raise the overnight rate to 3% this year and move aggressively to keep inflation under control. Cleveland Fed President Loretta Mester echoed Bullard's call, while San Francisco Fed President Mary Daly said on Tuesday it was time to end accommodative measures.
The market reckons there is a 72.2% chance the Fed will raise rates by 50 basis points in May 2022, with the probability of a bigger hike rising from just above 50% on Monday.
Ten-year government bond yields in the United States have also reached new highs since May 2019.
Optimism about a settlement of the war in Ukraine, which began with Russia's invasion on February 24, is starting to fade, leading some investors to believe there is potential for an upside breakout, McCarthy said. The West could also announce more sanctions against Russia.
Spot gold could fall into a range of $1,891 to $1,903 an ounce as the downtrend since the March 8 high of $2,069.89 appears to be continuing, Reuters technical analyst Wang Tao said.
In other precious metals, silver rose 0.3 percent, palladium climbed 3.2 percent to $2,565.02, while platinum slipped 0.2 percent.