Gold regains some balance on Russia’s latest jitters; Focus on Fed

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Spot gold rose 0.7% to $1,673.91 an ounce.

Gold rose Wednesday after Russian President Vladimir Putin’s partial mobilization announcement rekindled interest in precious metals, although a strong dollar and expected rate hikes in the US curbed the gains.

Spot gold rose 0.7% to $1,673.91 an ounce as of 1004 GMT. US gold futures were up 0.7% to $1,682.60.

Putin said he signed a decree on partial mobilization on Wednesday, saying he was defending Russian territories and that the West wanted to destroy the country.

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“The increased mobilization, the escalation in that region and the fear of escalation in terms of the weapons used are factors that help gold to some extent,” said independent analyst Ross Norman.

“However, it is clear that we have the strength of the dollar… and a broadly forecasted 75 basis point increase in the Fed funds rate, which has not helped gold in particular lately.”

Gold’s gains were held in check as investors also sought refuge in the dollar, which reached a new two-decade high against a basket of other currencies, making precious metal more expensive for foreign buyers.

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The focus remained on the Fed’s policy decision due at 1800 GMT, with traders factoring in an 81% chance of another 75 basis point rate hike and a 19% chance of a 100 bp hike.

While gold is considered a safe investment during political and financial uncertainties, rising interest rates obscure its appeal because it yields no interest.

So far, major thresholds have not proven to be a strong support for gold, so if the Fed surprises with a 100 basis point increase, the price could quickly dip to a new low for the year with the potential for a drop below USD. 1,600.” Kinesis Money analyst Rupert Rowling said in a note.

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Reflecting sentiment, the SPDR Gold Trust recorded its largest one-day outflow since July 18 on Tuesday.

Spot silver gained 1% to $19.49 an ounce, platinum rose 1.2% to $933.19 and palladium climbed 0.6% to $2,179.49.

(This story was not edited by The Switzerland Times staff and was generated automatically Platforms.)

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