Precious metals fell on Tuesday with gold slipping from a multi-month high and palladium shedding more than 5% as news that some Russian troops near Ukraine were returning to their bases dented demand for safe-haven assets.
Spot gold was down 0.8% at $1,855.06 per ounce by 01:57 p.m. ET (1857 GMT), after hitting its highest since June 11 at $1,879.48.
U.S. gold futures settled down 0.7% at $1,856.20.
"As a result of a light de-escalation in the Russian-Ukraine situation, we have seen a little pullback in safe-haven products such as gold," said David Meger, director of metals trading at High Ridge Futures.
Stocks and other risky assets made a modest recovery, halting a market selloff over several days. [MKTS/GLOB]
Meanwhile, data showed U.S. producer prices increased more than expected in January.
Hotter-than-expected inflationary data has been weighing on the gold market, as it could lead to a more hawkish Federal Reserve, Meger said.
While bullion is considered a hedge against inflation and geopolitical risks, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.
Investors now await minutes from the Fed's January policy meeting on Wednesday. Fed fund futures are pricing a 50 basis point rate hike in the central bank's March policy meeting.
Palladium slipped 4.6% to $2,252.68 per ounce, after fears of supply disruption due to the Russia-Ukraine conflict drove it to a two-week high on Monday.
"Russia accounts for 9% of primary platinum supply, 35% of primary palladium output and 7% of rhodium production. Of these, palladium could be the most affected given its supply concentration and our expectation of an undersupplied market this year," Standard Chartered said in a note.
Spot silver dropped 2% to $23.36 per ounce, platinum was down 0.4% at $1,024.13.
(Reporting by Brijesh Patel in Bengaluru; Editing by Vinay Dwivedi and Krishna Chandra Eluri)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
RECOMMENDED FOR YOU