Title: Gold Down, UAE Comments Induce Drop in Oil and Improved Risk Sentiment

Mar 09, 2022 11:46PM ET

By: AnalysisWatch

Gold prices were lower in Asia on Thursday morning. Investors withdrew from the yellow metal, regarded as a safe haven, as US government bond yields climbed and oil declined following comments from the United Arab Emirates.

Gold futures slipped 0.11% to $1,986.10 an ounce by 11:42 p.m. ET, after dropping 1% earlier.

The yellow metal dropped about 3% in the preceding session, the slowest daily slide since January 2021, wrapping up a rally that took it near a record high set in August 2020. The yield on US 10-year government bonds increased for a third straight day on Wednesday as inflation remains a concern amid a decline in oil prices.

On the data front, the US will report its CPI later in the day, and the Federal Reserve will also report its latest monetary policy statement on March 16. On the other hand, the ECB will also make policy decisions throughout the day.

Commodity prices eased off their rally on Wednesday. That rally took them to multi-year peaks as markets stomached supply cutoffs by Russia and Ukraine, two major sources of energy, metals, and crops. However, the dispute related to Russia's incursion into Ukraine on February 24 continues.

The US is also pressing other oil players to boost production where feasible. The United Arab Emirates and Saudi Arabia are two of the few oil-exporting countries and allies able to do so.

In other noble metals, palladium dropped 1.1% to $2,904.04 an ounce. The metal, used in catalytic converters to lower emissions, climbed to a record high of $3,440.76 an ounce on Monday, prompted by concerns that Russia, one of the biggest producers, could suffer supply shortages. Silver dropped 0.90% and platinum declined 1.10% to $1,065.14 an ounce.