Gold slips after crossing $1,900

Gold slips after crossing $1,900

Gold slips early Friday after crossing $1,900-an-ounce threshold in the previous session amid escalating tensions between Russia and Ukraine. The yellow metal looks headed to its third straight weekly rally.

A potential meeting between U.S. and Russian officials next week over the crisis knocked prices off the highs. Gold is a traditional hedge against geopolitical uncertainty, so the hint of diplomacy weighed the yellow metal down after it touched its highest point since June 2021.

Front-month gold futures rose 1.6% Thursday to settle at $1,902.00 an ounce on Comex. The metal gained 3.3% in the first four days of the week. Gold dropped 1.8% in January, its worst month since September. It retreated 3.5% in 2021. Currently, the April contract is off $3.50 (-0.18%) an ounce to $1,898.50 and the DG spot price is $1,898.30.

U.S. Secretary of State Antony Blinken on Thursday accepted an invitation to meet with Russian Foreign Minister Sergei Lavrov next week, likely somewhere in Europe, though Washington continued to warn that a Russian invasion of Ukraine could be imminent.

Gold has also come under pressure because of anticipation of a series of Federal Reserve interest rate hikes beginning in March because of high inflation. The rate increases are bearish for gold — making the precious metal less attractive an investment — though inflation itself is bullish for gold.

St. Louis Fed President James Bullard said Thursday that the central bank needs to act before inflation gets out of control.

“We’re more at risk now than we’ve been in a generation that this could get out of control,” he said on a panel at Columbia University. He has called for rates to rise by a full percentage point by July.

The U.S. January inflation report showed the biggest year-on-year jump in about four decades. The consumer price index for January showed a 7.5% annual rise, the highest monthly increase since 1982. The data came out last week.

Meanwhile, Cleveland Fed President Loretta Mester said that the central bank will have to act faster than it did after the Great Recession to raise rates. She spoke at New York University.

Other central bank officials are set to speak Friday at the U.S. Monetary Policy Forum.

Front-month silver futures increased 1.1% Thursday to $23.92 an ounce on Comex. The May contract is up 2.1% so far this week. Silver dropped 4.1% in January after gaining 2.4% in December. It fell 12% in 2021. Silver prices are tied to industrial demand. The May contract is currently up $0.108 (+0.45%) an ounce to $24.030 and the DG spot price is $24.02.

Spot palladium rose 3.8% Thursday to $2,381.50 an ounce, and it’s up 7.5% in the first four days of the week. Palladium jumped 24% last month after rallying 9.6% in December. It retreated 22% in 2021. Palladium’s main use is in catalytic converters for gasoline-powered vehicles. Currently, the DG spot price is down just a tick – $0.60 an ounce – to $2,375.50.

Spot platinum added 2.7% Thursday to $1,101.50 an ounce, and it’s up 7.2% so far this week. The metal rose 5.7% in January after gaining 2.9% in December. It lost 9.4% last year. The DG spot price slipped $7.10 an ounce to $1,090.40, currently.


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