Gold prices rose on Wednesday, supported by a dip in the U.S. dollar and Treasury yields, though signs of progress in Russia-Ukraine peace talks dented the metal’s appeal as a safe haven and kept gains in check.
U.S. gold futures rose 0.3% to $1,923.90. Spot gold was flat after hitting its lowest since Feb. 28 on hopes for a negotiated end to the Ukraine conflict.
?(Weaker) dollar has provided a level of support for gold… bond prices bounced from a key level of support yesterday which helped push yields lower despite the supposed risk-on rally seen across equities. And that’s provided another pillar of support for gold,” City Index senior market analyst Matt Simpson said.
Investors remain wary of Russia’s true intention behind its pledge to scale down “military operations”, he said.
Ukraine reacted with skepticism to Russia’s promise in negotiations to scale down military operations around Kyiv and another city as some Western countries expected Moscow to intensify its offensive in other parts of the country.
The dollar index held near a more than one-week low hit in the previous session, making gold less expensive for other currency holders.
U.S. benchmark 10-year yields also slipped from near three-year highs, and lower yields decrease the opportunity cost of holding non-yielding bullion.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, slipped 0.2% to 1,091.44 tonnes on Tuesday.