Gold prices fell on Friday en route to their worst week since late November, as safe-haven demand fuelled by Russia’s invasion of Ukraine subsided.
Spot gold slipped 0.4% to $1,934.62 per ounce, as of 0436 GMT. US gold futures fell 0.4% to $1,935.00.
“The Ukraine situation isn’t as intense as it was, so the anxiety isn’t really there to drive gold up as a safe-haven,” said Matt Simpson, a senior market analyst at City Index.
Russian troops appeared to stall in their advance on Ukrainian cities as the war entered its fourth week.
The dollar firmed, pressuring greenback-priced bullion, while stock markets took a breather after several days of sizeable gains.
Gold prices have fallen about 2.6% so far this week as investors priced in possibilities of aggressive interest rate hikes by the US Federal Reserve ahead of a policy decision on Wednesday.
The metal recovered a bit after the Fed said it was raising borrowing costs along expected lines, while acknowledging the challenges presented by soaring inflation.
However, “the combination of steeper interest rates over the course of the year and gold rejecting levels near the all-time high means that in the very short term, risks for gold are on the downside,” said Michael McCarthy, chief strategy officer at Tiger Brokers, Australia.
Higher interest rates tend to raise the opportunity cost of holding non-interest paying gold.
Palladium rose 3.9% to $2,608.17 per ounce, but was set for a weekly fall of about 7.5% as fears about supply from top producer Russia quickly evaporated.
China’s intent to tackle COVID-19 with minimal impact to the economy and people’s lives, and promise of further stimulus, have brought palladium bulls back to the table, Simpson said, after many sessions of volatility that saw platinum, palladium and key metals drop to technical support Reuters
Spot silver was down 0.5% to $25.20 per ounce. Platinum rose 0.1% to $1,022.15. Reuters