By Asha Sistla
(Reuters) – Gold prices rose on Wednesday, supported by a dip in the U.S. dollar and Treasury yields, though signs of progress in Russia-Ukraine peace talks dented the metal’s appeal as a safe haven and kept gains in check.
Spot gold was up 0.2% at $1,922.65 per ounce, as of 0744 GMT, after the metal hit its lowest since Feb. 28 on hopes for a negotiated end to the Ukraine conflict. U.S. gold futures rose 0.6% to $1,928.80.
City Index senior market analyst Matt Simpson said investors remain wary of Russia’s intentions following its pledge to scale down “military operations” around Kyiv and another city.
Ukraine reacted with scepticism, and some Western governments fear Moscow aims to intensify its offensive in other parts of the country.
Simpson said gold benefitted from both currency and bond market trends.
The dollar index held near a more than one-week low hit in the previous session, making gold less expensive for other currency holders. [USD/]
U.S. benchmark 10-year yields also slipped from near three-year highs, and lower yields decrease the opportunity cost of holding non-yielding bullion. [US/]
The weaker “dollar has provided a level of support for gold,” Simpson said, adding, “bond prices bounced from a key level of support yesterday which helped push yields lower despite the supposed risk-on rally seen across equities. And that’s provided another pillar of support for gold.”
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, slipped 0.2% to 1,091.44 tonnes on Tuesday. [GOL/ETF]
Spot silver rose 0.3% at $24.83 per ounce and platinum was up 0.1% to $983.78.
Palladium fell 0.5% to $2,137.78, after dipping to a more than two-month low of $2,032.97 in the last session.
The auto-catalyst metal has tumbled nearly 40% since scaling an all-time peak on March 7 as supply concerns from Russia eased.
(Reporting by Asha Sistla in Bengaluru; Editing by Rashmi Aich, Subhranshu Sahu & Simon Cameron-Moore)
