LONDON: Gold prices edged lower in volatile trade on Monday as a possible summit between the US and Russian presidents to discuss Ukraine encouraged risk sentiment and nudged investors away from safe-haven assets.
Spot gold fell 0.1% to $1,896.43 per ounce by 1025 GMT, down from a session high of $1,908.03, its best level since June 3. US gold futures were flat at $1,899.10.
US President Joe Biden and Russian President Vladimir Putin have agreed in principle to a summit over Ukraine, French leader Macron said on Monday, offering a possible path out of one of the most dangerous European crises in decades, lifting risk sentiment across major markets.
The potential meeting, while easing demand for gold, also led a slight move away from its rival safe-haven the US dollar, limiting losses in the greenback-priced bullion.
“(Gold) is holding up well. The last time we moved up to these levels it ended up being a bull trap and the market came off very sharply. We’ve seen some good flows into the ETFs, which is encouraging,” independent analyst Ross Norman said.
SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.5% to 1,024.09 tonnes on Friday.
“The next few days will be key in determining whether fears over Ukraine can outweigh the encouraging data on the economic front as well as the likelihood of a series of interest rate hikes this year by central banks,” analysts at Kinesis Money said.
Federal Reserve officials on Friday quelled what had been rising market expectations for an aggressive initial response to 40-year-high US inflation, signalling that steady interest rate hikes should be enough.
Rising interest rates increase the opportunity cost of holding non-yielding bullion. Spot silver fell 0.8% to $23.77 per ounce, while platinum rose 0.6% to $1,073.72, and palladium gained 1% to $2,367.93.
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