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NEW YORK: Gold fell to more than a two-week low on Wednesday as the safe-haven appeal of the metal was dimmed by hopes of progress in Russia-Ukraine talks, with rising bond yields adding pressure to bullion as markets braced for a U.S. interest rate hike.

Spot gold was down 0.4% to $1,909.41 per ounce at 12:15 p.m. EDT (1615 GMT), after touching its lowest level since March 1 at $1,903.59 earlier in the session.

U.S. gold futures fell 0.9% to $1,912.40.

“Everybody is anticipating the Federal Reserve verdict this afternoon and the big question is, whether it is a quarter-point or half-point rate hike,” said Bob Haberkorn, senior market strategist at RJO Futures.

“Stocks have been resilient this morning and bouncing back, so there is a risk-on sentiment in the market, and gold, being a safety asset, is lower for the time being.”

Wall Street’s main indexes jumped on Wednesday, led by gains in technology and financial stocks.

The Fed policy statement and quarterly economic projections, due at 2 p.m. EDT (1800 GMT), will be followed by Fed Chair Jerome Powell’s news conference. Traders are pricing in an increase in the U.S. central bank’s benchmark overnight interest rate of at least 25 basis points.

Benchmark 10-year U.S. Treasury yields hit almost three-year highs. Gold is highly sensitive to rising U.S. interest rates, and consequently higher yields increase the opportunity cost of holding non-yielding bullion.

Ukrainian President Volodymyr Zelenskiy said peace talks were sounding more realistic, even as Russia’s invasion continued, but that more time was needed.

“Some positive news reports on the Russia-Ukraine war front and the recent big drop in crude oil prices are lifting marketplace sentiment,” Jim Wyckoff, senior analyst at Kitco Metals, wrote in a note.

Spot silver fell 0.9% to $24.64 per ounce, while platinum rose 2.5% to $1,010.80.

Palladium edged 0.7% lower to $2,407.84 per ounce amid receding supply fears.

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