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Title: Gold Up as Powell Takes More Aggressive Stance, Ukraine Conflict Continues


Mar 22, 2022 01:01AM ET


By: AnalysisWatch


Gold prices climbed in Asia on Tuesday morning as US government bond yields reached multi-year highs. While Federal Reserve Chairman Jerome Powell took a tighter stance on inflation, the ongoing Ukraine conflict also boosted safe-haven assets.


Gold futures rose 0.39% to $1,937 by 12:58 p.m. ET.


Powell warned that the Fed would raise interest rates by more than the usual amounts if necessary to bring down "far too high" inflation.


European Central Bank President Christine Lagarde will be speaking at the BIS Innovation Summit later today. Bank of England Governor Andrew Bailey and Powell will be speaking a day later.


The yield on the 10-year US Treasury bond climbed above 2.3% for the first time since May 2019. The carefully watched spread between two-year and 10-year government bond interest rates continued to flatten, pointing to a potential economic slowdown.


Strong movements in the US Treasury market increasingly point to the risk of an approaching recession, as market experts say markets doubt the Fed's plan to bring about a "soft landing" for the economy while it raises interest rates to fight inflation.


However, the Ukraine conflict, which has been ongoing since Russia invaded the country on February 24, dampened the yellow metal's decline. Ukraine said on Monday it would not abide by Russia's ultimatum to halt its defenses of the city of Mariupol.


Palladium, used by carmakers in catalytic converters to reduce emissions, fell 0.5%.

Silver gained 0.5% and platinum rose 0.3%.

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