Gold Prices Fall as Fed Prepares to Point the Way for Rate Hikes

The oro It fell on Tuesday due to the advance of the dollar and the yields of the United States Treasury bonds due to the expectations of faster rises in the Federal Reserve interest rates, but the bullion remained above the level of US $ 1,830 thanks to to the demand for safe-haven assets due to the increase in tensions over Ukraine.

At 1031 GMT, spot gold was down 0.4% at $1,836.06 an ounce, while US gold futures were down 0.3% at $1,836.20.

“Even though the Fed will likely announce the start of a rate hike cycle this week, gold is holding up well. Support for the gold metal comes from high inflation and high market volatility”, said analyst Giovanni Staunovo of UBS.

“Unless the Fed surprises with an even more aggressive statement, gold (could) remain supportedStaunovo said, adding that gold historically outperforms stocks when market volatility increases.

Appetite for risk assets was weighed down by concerns of Russia invading Ukraine. NATO said on Monday it was putting forces on standby and bolstering Eastern Europe with more warships and warplanes.

Benchmark 10-year US Treasury yields recovered from their lows the day before, while the dollar hovered near two-week highs before the start of the two-day monetary policy meeting. the Fed, which will start later in the day.

The market expects the Fed to signal on Wednesday that it plans to raise rates in March and offer an idea of ​​how aggressive it intends to be. Rising interest rates increase the opportunity cost of holding bullion, which does not earn interest.

Among other precious metals, silver fell 1.1% to $23.70 an ounce, platinum fell 0.8% to $1,019.43 and palladium gained 1.5% to $2,179. 75.

With information from Reuters.