Higher U.S. Treasury yields and a stronger dollar weighed on gold on Monday, while easing supply fears ahead of Russia-Ukraine peace negotiations brought autocatalyst palladium down over 8%.
By 12:01 p.m. ET(1601 GMT), spot gold had fallen 1.07 percent to $1,936.36 per ounce, while U.S. gold futures had fallen 0.9 percent to $1,936.40.
Although gold is considered an inflation hedge, rising interest rates in the United States make owning non-yielding metal more expensive. [USD/]
Because of inflation concerns, gold’s fall should be limited, according to Jim Wycoff, the senior analyst at Kitco Metals.
“Whenever we have inflationary pressures like we have today, the metals markets have been sought after in the past, and I expect that will continue to be the case.”
The dollar increased 0.5 percent, making gold more expensive for holders of other currencies.
Hopes of progress in the first face-to-face peace negotiations between Ukraine and Russia in more than two weeks added to gold’s safe-haven appeal.
We’ve already seen a significant portion of the war premium in gold removed, but there may be more to come. As a result, gold is currently facing considerable headwinds,” said Ross Norman, an independent analyst.
Palladium was trading at $2,204.61 per ounce, down 5.7 percent from its lowest level since January 25. Since reaching a new high on March 7, the metal has lost approximately 34% of its value.
“Despite the airspace ban between Russia and the United States and Europe, Russia can still export palladium via alternative routes. As a result, I believe certain supply disruption concerns are dissipating “Giovanni Staunovo, a UBS analyst, stated.
Silver sank 1.9 percent to $25.03, while platinum fell 1.6 percent to $986.36.