By Bharat Gautam
(Reuters) – Gold eased on Friday, consolidating at the end of a volatile week as investors sized up potential rate hikes from the U.S. Federal Reserve, but analysts warned an escalation in Ukraine could spur further safe-haven demand.
Spot gold was down 0.3% at $1,991.20 per ounce by 1050 GMT, but remained poised for a weekly rise of about 1.2%. U.S. gold futures were down 0.1% at $1,997.70.
Gold is now consolidating, with the likelihood of interest rate hikes from the U.S. Federal Reserve adding some pressure while investors awaited additional developments surrounding Ukraine, said Brian Lan, managing director at dealer GoldSilver Central.
U.S. inflation ballooned in February, data showed on Thursday, locking in expectations for an interest rates hike next week, which would in turn translate into increased opportunity cost of holding non-yielding bullion.
While firm yields are for now dragging on gold, which is pausing for breath, an escalation in Ukraine would throw technical factors “out of the window,” said Michael Hewson, chief market analyst at CMC Markets UK. [US/]
Investors rushed to safe-haven assets as the Ukraine crisis snowballed, boosting gold prices on Tuesday to near their record levels hit in August 2020, but the rally has since decelerated.
In gold, palladium and across markets, investors are struggling to price anything fairly, given the headline risk, Hewson said, adding, “anyone who says they can tell you where gold or anything will be in a week’s time is being economical with the facts.”
Spot palladium rose 0.9% to $2,955.62 per ounce. The metal set a record high earlier this week on fears of supply disruption from top-producer Russia, the subject of Western sanctions for its invasion of Ukraine.
Silver was down 0.2% at $25.82 per ounce. Platinum was up 0.2% at $1,070.65, but was facing its biggest weekly decline since November.
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by Maju Samuel)
