Gold slips from over 8-month high as Biden-Putin meeting plans ease demand

Shafaq News/ Gold eased after hitting a more than eight-month high on Monday, as a plan for the U.S. and Russian presidents to hold a summit on the Ukraine crisis dented safe-haven demand, while looming Federal Reserve rate hikes further pressured the metal.

Spot gold fell 0.3% to $1,891.33 per ounce by 0514 GMT, retreating from a session peak of $1,908.02 - its highest since June 3. U.S. gold futures GCv1 were down 0.3% to $1,894.20.

U.S. President Joe Biden has accepted in principle a summit with Russia's Vladimir Putin over the Ukraine crisis, after the foreign ministers of the two countries meet next week and if an invasion has not occurred, the White House said on Sunday.

"Global investors are deeply concerned about the potential (conflict) between Russia and Ukraine, and the U.S. president has been repetitively saying that an invasion is possible in the days to come," said Margaret Yang, a strategist at DailyFX.

"On the other hand, investors are also mewling on the Fed rate hike in March, so that is likely to suppress gold prices."

Investors are worried over prospects of an aggressive Fed tightening as inflation runs rampant. At least six Fed officials are set to speak this week and investors will be keen to find out their views on a possible 50 basis point hike in March.

Rising interest rates increase the opportunity cost of holding non-yielding bullion.

Spot silver fell 0.9% to $23.75 per ounce, platinum rose 0.2% to $1,069.87.

Auto-catalyst metal palladium dipped 1.6% to $2,308.23.

"Palladium prices spiked above $2,300/oz due to increased risk from Russia. Nearly 35% of palladium production comes from Russia. This saw palladium backwardation widening last month," ANZ analysts said in a note.

"Investor interest remains subdued, on expectations of low chip availability lingering into Q2 2022."

Source: Reuters