Gold prices fall on possible Fed rate hikes

The gold fell on Friday, consolidating at the end of a volatile week, as investors eyed likely interest rate hikes from the US Federal Reserve (Fed), but analysts warned a rally in Ukraine could spur higher demand. for refuge.

Spot gold was down 0.3% at $1,991.20 an ounce by 10:50 GMT, but was still on track to close up around 1.2% on the week. US gold futures were down 0.1% at $1,997.70.

Gold is consolidating, with the high probability that the US Federal Reserve will raise interest rates adding some pressure as investors await developments in Ukraine, said Brian Lan, managing director of dealer GoldSilver Central.

Inflation in the United States soared in February, according to data on Thursday, suggesting a rise in interest rates next week, which in turn would translate into an increase in the opportunity cost of holding bullion.

While the strength in yields is dragging down gold for now, which is pausing for breath, a rally in Ukraine would throw off the technicals.”Through the windowsaid Michael Hewson, chief market analyst at CMC Markets UK.

Investors have sought safe-haven assets as the Ukrainian crisis deepened, pushing gold prices closer to record highs hit in August 2020 on Tuesday, but the rally has since slowed.

Investors are trying to price gold and palladium fairly, given the riskiness of the news, Hewson said, adding that “anyone who says they can anticipate where the gold or anything will be a week from now is being factually elusive”.

Spot palladium was up 0.9% at $2,955.62 an ounce. The metal hit an all-time high earlier this week on fears of a supply disruption from top producer Russia, which is under Western sanctions over its invasion of Ukraine.

Silver was down 0.2% at $25.82 an ounce. Platinum was up 0.2% at $1,070.65, but faced its biggest weekly drop since November.

With information from Reuters