Title: Gold Up, but Remains Flat as Fed Seeks to Temper Interest Rate Hike Fears

Mar 02, 2022 11:28PM ET

By: AnalysisWatch

Gold prices rose in Asia on Thursday morning and were unchanged as investors' risk appetite increased. The US Federal Reserve sought to ease rate hike fears by countering rising safe-haven demand triggered by Russia's invasion of Ukraine on February 24.

By 11:25 p.m. ET, gold futures were up 0.34% at $1,928.80.

Russia continues to advance into Ukraine, with the country's second-largest city, Kharkiv, under heavy bombardment on Wednesday. The invasion itself was condemned by a broad majority in a United Nations vote.

The biggest attack on a European state since 1945 has driven hundreds of thousands of Ukrainians to flee. It has also led to a series of sanctions against Russia and stoked fears in the West of a wider conflict. The latest round of sanctions announced by the US bans the export of certain refining technologies, making it harder for Russia to modernize its oil refineries.

Fed Chairman Jerome Powell said the central bank would begin raising interest rates "cautiously" at its next meeting later this month. He added, however, that the central bank was prepared to move more aggressively if inflation did not cool as quickly as expected.

US stocks rallied and yields on US 10-year government bonds rose on Wednesday after the remarks.

The European Central Bank will also release the minutes of its February meeting later in the day.

In Asia-Pacific, China released its Caixin Purchasing Managers' Index for the services sector later in the day, which came in at 50.2 in February 2022. Japan also released its service PMI, which came in at 44.2.

In other precious metals, palladium fell 1.3% to $2,633.65, after touching $2,722.79 on Tuesday, its highest level since July 2021. Silver and platinum each fell 0.4%.