The ongoing Ukraine war has pushed up commodity prices, from crude oil to wheat and metals. Heightened geopolitical risks may keep gold prices afloat as the yellow metal is widely perceived as a hedge against such risks. Turkey said that Kyiv and Moscow are moving closer to strike a ceasefire agreement, while a top Ukrainian aide said Russia had turned to “more destructive artillery.” Ukraine has rejected a Russian demand to surrender the besieged southern port city of Mariupol. Meanwhile, gold prices have been aided by ongoing conflict between Ukraine and Russia.
Last week, Powell said the US economy is in good shape and strong enough to withstand monetary tightening. Meanwhile, investors will be eyeing Fed Chair Jerome Powell’s address at the annual meeting of the National Association for Business Economics later today. His hawkish-biased comments may limit the upside potential for gold if markets were to price in one or more 50bps rate hikes down the road. US CPI hit a four-decade high of 7.9% in February, urging the central bank to tighten at a faster pace to tackle eye-watering inflation that threatened the post-pandemic economic recovery.įormer US Treasury Secretary Lawrence Summers said the Fed will need to raise borrowing cost to 4 - 5% in order to bring inflation under control. The prospect of monetary tightening weighed on the non-interest-bearing metal. The Federal Reserve raised interest rate by 25 bps for the first time since 2018 and projected six more rate hikes this year at the FOMC meeting. Gold prices rebounded 0.3% during Monday’s A PAC mid-day trading sessio n after falling 3.4% last week.
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