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Gold prices flat as investors hedge bets on Fed meeting, Russia-Ukraine crisis

Gold prices flat as investors hedge bets on Fed meeting, Russia-Ukraine crisis

Spot gold was flat at $1,841.56 per ounce by 0117 GMT. U.S. gold futures were also steady at $1,842.90.

Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising U.S. interest rates, which increases the opportunity cost of holding non-interest bearing bullion. Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising U.S. interest rates, which increases the opportunity cost of holding non-interest bearing bullion.

Gold prices were little changed on Tuesday, as investors looked for interest rate hike cues from the U.S. Federal Reserve's meeting, while safe-haven bullion was buoyed by risk-off trades over concerns of Russia-Ukraine discord.

FUNDAMENTALS

* Spot gold was flat at $1,841.56 per ounce by 0117 GMT. U.S. gold futures were also steady at $1,842.90.

* NATO sent reinforcements and the United States put troops on alert as Ukraine tensions rose, while Britain said it was withdrawing some staff and dependents from its embassy in Ukraine, a day after the United States said it was ordering diplomats' family members to leave.

* Wall Street bounced back from a steep sell-off late in the session to close higher on Monday, with bargain hunters pushing the indexes into positive territory.

* Benchmark U.S. 10-year Treasury yields fell to one-week lows on Monday, reducing the opportunity cost of holding non-interest bearing bullion.

* Investors are focused on the Fed's two-day policy meeting, which starts on Tuesday, amid expectations the central bank will signal that it planned to raise rates by 25 basis points in March.

* Gold is generally seen as an inflationary hedge, but it is highly sensitive to rising U.S. interest rates, which increases the opportunity cost of holding non-interest bearing bullion.

* Sudan will expand its use of gold exports to cover imports of essential goods, as it embarks on a new 2022 budget without foreign aid during an economic downturn after a coup.

* Spot silver fell 0.8% to $23.77 an ounce. Palladium shed 0.6% to $2,134.69 and platinum was down 0.7% to $1,019.48.

DATA/EVENTS (GMT) 0900 Germany Ifo Business Climate New 0900 Germany Ifo Curr Conditions New 0900 Germany Ifo Expectations New 1500 US Consumer Confidence

Published on: Jan 25, 2022, 7:32 AM IST
Posted by: Mehak Agarwal, Jan 25, 2022, 7:29 AM IST