Gold Price Decreases As Talks Between Russia And Ukraine Continue

Gold continued to decline this week alongside the lastest ceasefire talks between Ukraine and Russia, which decreased the demand for safe-haven assets. Many are now betting that the US Federal Reserve may in fact raise the interest rates faster than expected, also impacting market sentiment.

Gold Futures

As of Tuesday 15 March, US gold futures stand at $1,917.7 – a fall of 2.2% – and Spot Gold has experienced a fall of 1.8% to $1,916.01 per ounce.

As the situation in Ukraine continues to unfold, the demand for gold is experiencing a de-escalated lull as a direct result of the continuing uncertainty and volatility of the markets.

The price of gold is also set to fall for its third session in a row and this will be the longest losing streak since the end of January.

Fed Impact

Following lengthy meetings of the Fed this week, there is an expectation that the borrowing costs will be raised by a quarter of a percentage point.

Due to this impending announcement, there has been an elevation of the US 10-year treasury yields which, in turn, has increased the pressure on gold. The pressure on gold has risen even further due to rising interest rates, which have increased the opportunity costs of non-yielding bullion holding.

Alongside this news, following its weakest session on easing supply fears, spot palladium experienced an increase of 0.7%, meaning that it now stands at $2,433.50 per ounce.

Palladium, as a low liquidity market, has not been shielded successfully, with the war medium being taken from the commodity markets.

There has been a decline in silver and platinum, with spot silver shed experiencing a fall of 0.86% and now standing at $25.08 per ounce, and platinum experiencing an even more significant loss of 5.61%, meaning it now stands at $992.80.