The yellow metal has eased its bullish momentum after hitting $1,900 an ounce, a price point not traded since June 2021, an eight-month high, as news of President Joe Biden and President Vladimir Putin agreeing to meet in principle at a summit to discuss matters relating to the possible invasion of Ukraine by Russian forces.
The yellow metal has just come off three consecutive weeks of gains, driven by growing concerns of a Russian invasion of Ukraine. U.S. President Joe Biden said on Friday that an invasion could come “within days”, an accusation that Russia continues to refute. The statement caused the price of Gold to trade a high of $1,905.00 on Friday.
The Gold futures is down 0.45%, currently trading $1,891.00 an ounce. The dollar index (DXY), which measure the strength of the United States’ dollar and is known for moving inversely to gold, is currently trading marginally bearish by 0.25%, trading 95.78 basis points.
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What you should know
- U.S. press secretary, Jen Psaki explained that the meeting between the two world leaders would follow a meeting between Secretary of State, Antony Blinken and his Russian counterpart, Foreign Minister Sergey Lavrov. The meeting is expected to take place later this week.
- Jen Psaki emphasized that this agreement is subject to Moscow abstaining from an invasion. Psaki also explained that the president repeatedly said diplomacy would continue until an invasion occurred. Upon completing the engagement with President Putin, Biden agreed in principle to meet him, assuming there is no invasion.
- The move towards safe havens has over-ridden concerns about a potential interest rate hike from the U.S. Federal Reserve. Fed Governor Lael Brainard and New York Fed President John Williams, as well as Chicago Fed President Charles Evans, said during the previous week that they were eager to start hiking rates. However, they were not seeking a super-sized hike or a move before the central bank’s next scheduled meeting.
- All eyes are currently on Fed Governor, Michelle Bowman, who is expected to speak later in the day, and her colleagues, including Loretta Mester and Raphael Bostic, will speak on Thursday. Their speeches will give investors a clue as to when a rate hike is expected and by how big it is going to be.
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In other central bank news, the People’s Bank of China’s loan prime rates are due later in the day. The Reserve Bank of New Zealand will hand down its policy decision on Wednesday, with Bank of England Governor Andrew Bailey appearing before the Treasury Committee also on Wednesday. The Bank of Korea will hand down its policy decision on Thursday.
In other precious metals, Silver is down 1%, currently trading $23.75 an ounce. Platinum is down 0.11%, currently trading $1,074.20 an ounce. Palladium is down 0.45%, currently trading $2,310.15 an ounce.
