Apr 26, 2022 01:05AM ET
By: AnalysisWatch
Gold rose Tuesday as the dollar weakened, and palladium also rallied after concerns about lower demand due to China's COVID freezes pushed prices to a near one-month low in the previous session.
At 12:37 AM ET, spot gold was 0.3% higher at $1,903.97 per ounce, having hit its lowest level since March 29 in the previous session. U.S. gold futures rose 0.4% to $1,903.70 an ounce.
The dollar weakened from its two-year high reached in the previous session, making greenback gold prices cheaper.
However, 10-year U.S. Treasury yields gained, limiting gains in zero-interest gold.
In Asia, tentative support emerged as China eased foreign exchange reserves for local banks and set a neutral USD/CNY fix to support the yuan, said Jeffrey Halley, senior analyst at OANDA, adding that stabilization in gold prices appeared very fragile.
Meanwhile, Russia urged the world not to underestimate the significant risks of nuclear war, which it wants to reduce, and warned that conventional Western weapons are legitimate targets in Ukraine.
Gold bullion is considered a safe store of value in times of economic and political crisis.
Spot silver rose 0.8% to $23.79 per ounce, while platinum gained 1.1% to $930.87 and palladium rose 2.8% to $2,203.25.
Palladium prices fell nearly 13% on Monday to their lowest level since mid-March as investors feared further price declines. Closures of COVID-19 to major buyers China reduced the demand outlook for the metal, which is used in vehicle exhaust to reduce emissions.
As with gold, palladium's recovery appears fragile, and an escalation of the COVID-19 situation in Beijing will almost certainly lead to a test of support at $2,025, Halley said.
Nornickel, the world's largest palladium producer, reported Monday that its palladium output fell in the first quarter compared with a year earlier, but kept its previous production forecast for 2022 unchanged despite the difficulties posed by Western sanctions against Moscow.
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