Gold futures retreated from a 13-month high on Wednesday as expectations for further talks between Russia and Ukraine helped ease haven demand for the metal.
Meanwhile, in remarks prepared for congressional testimony, Federal Reserve Chairman Jerome Powell said the central bank intends to raise its policy interest rate following the end of its two-day meeting on March 16. Powell was to speak on pricing pressures and the central bank’s efforts to battle it in front of the House Wednesday.
At last check, April gold
GCJ22,
GC00,
was trading $13.90, or 0.7%, to trade at $1,929.90 an ounce. A 2.3% gain on Tuesday took bullion to the highest most-active contract finish since January 2021. May silver
SIK22,
also lost 31.1 cents, or 1.2%, to $25.23 an ounce.
Gold and silver has seen corrections, since the start of the Russia-Ukraine war, whenever there have been talks, Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. The two metals tend to see another wave of price gains once the talks fail, he said, adding that he expects the talks to fail.
Russia and Ukraine on Wednesday were ready to resume talks aimed at stopping the war, even as Russia renews its assault on Ukraine’s second-largest city, according to a report from the Associated Press.
Gold’s latest moves follow President Joe Biden’s State of the Union address where the U.S. leader vowed to isolate Moscow and combat inflation, which has surged in the aftermath of the COVID-19 pandemic.
Soaring commodity prices are seen adding fuel to inflation already running at a nearly 40-year high, but have also sparked fears of an economic slowdown, clouding the outlook for the Fed.
Reduced expectations for larger interest-rate increases also has helped to bolster gold somewhat.
Market-based predictors were showing a less than 4% chance the Fed would raise interest rates by 50 basis points, or half a percentage point, when policy makers meet later this month. That’s down from 34% a week ago, according to the CME FedWatch tool. The market is now pricing in a 96.3% chance of a quarter-point increase and a 3.7% chance of a half-point rise.
Data from payroll processor ADP released Wednesday showed that U.S. businesses added 475,000 new jobs in February. That was more than the 400,000 increase forecast by economists surveyed by The Wall Street Journal. The private-sector employment data came ahead of the more closely followed Labor Department nonfarm payrolls later this week.
In other Comex trading, May copper
HGK22,
added 1.3% to $4.656 a pound. April platinum
PLJ22,
rose 0.8% to $1,060.90 an ounce and June palladium
PAM22,
traded at $2,642.50 an ounce, up 4.1%.
