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NEW YORK: Precious metals fell on Tuesday with gold slipping from a multi-month high and palladium shedding more than 5% as news about some Russian troops near Ukraine returning to their bases dented demand for safe-haven assets.

Spot gold was down 1.1% at $1,850 per ounce by 12:21 p.m. ET (1721 GMT), after hitting its highest since June 11 at $1,879.48.

US gold futures fell 1% to $1,851.70. “As a result of a light de-escalation in the Russian-Ukraine situation, we have seen a little pullback in safe haven products such as gold,” said David Meger, director of metals trading at High Ridge Futures.

Stocks and other risky assets made a modest recovery, halting a market selloff over several days, following signs of a de-escalation in geopolitical tensions. Meanwhile, data showed US producer prices increased more than expected in January.

Hotter-than-expected inflationary data has been weighing on the gold market, as it could lead to a more hawkish Federal Reserve, Meger said. While bullion is considered a hedge against inflation and geopolitical risks, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.

Investors now await minutes from the Fed’s January policy meeting on Wednesday. Fed fund futures are pricing a 50 basis point rate hike in the central bank’s March policy meeting.

Palladium slipped 5.7% to $2,226.68 per ounce, after fears of supply disruption due to the Russia-Ukraine conflict drove it to a two-week high on Monday. “Russia accounts for 9% of primary platinum supply, 35% of primary palladium output and 7% of rhodium production. Of these, palladium could be the most affected given its supply concentration and our expectation of an undersupplied market this year,” Standard Chartered said in a note. Spot silver dropped 2.4% to $23.26 per ounce, platinum was down 0.7% at $1,020.95.

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