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  • Writer's pictureanalysiswatch

Title: Gold Up, but Russia-Ukraine Ceasefire Talks and Western Sanctions Dulls Appeal

Feb 28, 2022 11:25PM ET

By: AnalysisWatch

Gold gained in Asia on Tuesday morning and retreated after strong performances in recent sessions. The start of ceasefire talks between Russian and Ukrainian officials and the imposition of further sanctions by Western countries against Russia reduced demand for the safe-haven yellow metal.

Gold futures were up 0.30% at $1,906.45 by 11:20 p.m. EDT, after rising more than 1% in the previous session.

Russian and Ukrainian officials began cease-fire talks near the border with Belarus four days after Russia invaded the neighboring country. But there is no indication that Russia intends to stop the invasion.

On Monday, the Russian Federation's Central Bank raised its key interest rate to 20% and imposed capital controls. But Governor Elvira Nabiullina said the sanctions prevent the central bank from selling foreign currency to support the ruble.

The number of Western companies pulling out of Russia is expected to rise, with companies such as BP and Shell already at the forefront.

In the Asia-Pacific region, Chinese data released earlier today showed that the manufacturing purchasing managers' index for February came in at 50.2, while the non-manufacturing PMI came in at 51.6. The manufacturing PMI was at 50.4, according to Caixin.

In other central bank news, the Reserve Bank of Australia kept its interest rate on hold at 0.10% after releasing its latest policy statement earlier in the day. On Wednesday, the Bank of Canada will release its policy statement, and a day later, the European Central Bank will also release the minutes of its February 2022 meeting.

Meanwhile, SPDR Gold Trust stocks rose 0.2% to 1,029.02 tonnes on Monday. In other precious metals, palladium rose 0.2% to $2,494.00 after reaching its highest level since July 2021 at $2,711.18 during the previous week. Silver fell 0.5% and platinum declined 0.2%.

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