Gold prices edged up on Monday as fighting in Ukraine buoyed demand for the safe-haven asset, although strength in US bond yields restricted bullion’s gains.

Spot gold was up 0.3% at $1,926.46 per ounce by 1110 GMT. US gold futures were down 0.2% at $1,925.90.

“We are treading water. The risk is more to the downside than to the upside at the moment, we will have to wait and see,” said Michael Hewson, chief market analyst at CMC Markets UK.

However, Hewson added, there is support for gold prices around last week’s lows of near $1,890, which could help gold move towards $1,940-$1,950.

Equities slipped as fighting in Ukraine raged on with no sign of a ceasefire even as diplomatic efforts continued.

Gold prices slightly up

However, the benchmark US 10-year yield was up at around 2.180%, increasing the opportunity cost of holding non-interest bearing gold.

Last week, gold prices lost more than 3%, their biggest weekly percentage drop since mid-June as optimism over the Russia-Ukraine peace talks and a US interest rate hike announcement dented demand for the safe-haven metal.

“Gold now looks to have seen its bullish surge fade for the time being,” Rupert Rowling, market analyst, Kinesis Money said in a note.

Gold is seeing pressure from Russia-Ukraine talks slowing the rush to safe-havens, and as interest rate hikes by the US Federal Reserve and the Bank of England confirm the hawkish trajectory central banks globally are adopting to tackle inflation, the note said.

Among other precious metals, spot silver was up 0.3% at $25.03 per ounce, platinum rose 0.8% to $1,030.00. Palladium gained 1.1% at $2,519.29.


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