PRECIOUS-Gold gains as Russia-Ukraine tensions intensify - Reuters.com
(Updates prices) * Fed rate hike expectations cap gold's gains * Prospects of further sanctions on Russia support bullion By Seher Dareen April 4 (Reuters) - Gold rose on Monday as investors sought
the safe-haven asset amid prospects of Western countries
imposing more sanctions on Russia over its invasion of Ukraine
and likely higher inflation, though a stronger dollar and rising
U.S. Treasury yields capped gains. Spot gold was up 0.4% at $1,932.78 per ounce by 2:32
p.m. EDT (1832 GMT). U.S. gold futures settled up 0.5% at
$1,934. There is a possibility of even higher inflation due to a
pandemic-related shipping slowdown in China as well as the war
in Ukraine, which bodes well for gold, said Daniel Pavilonis,
senior market strategist at RJO Futures. Investors also are looking ahead to the release on Wednesday
of the minutes from the Federal Reserve's last policy meeting
for signs that the U.S. central bank could raise its benchmark
overnight interest rate by half a percentage point next month. The safe-haven dollar rose to a one-week peak, also
supported by rising U.S. Treasury yields amid expectations that
U.S. interest rates will rise sharply. The currency's move
curbed gold's rise. Gold is highly sensitive to rising U.S. interest rates,
which increase the opportunity cost of holding non-yielding
bullion while boosting the dollar, in which it is priced. Global outrage spread on Monday over the killings of
civilians in northern Ukraine and looked set to galvanise the
West into slapping additional sanctions against Moscow, which
could possibly include Russia's energy exports. "Safe-haven demand may ease if peace talks between Russia
and Ukraine are successful, but inflation looks set to remain
elevated, which could continue to support the gold price,"
analysts at Heraeus Precious Metals wrote in a note. Gains on Wall Street on Monday also dimmed bullion's appeal,
as the Nasdaq and SP 500 index were boosted by megacap stocks
and a 20% jump in Twitter shares. Among other precious metals, spot silver fell 0.4% to $24.52
per ounce, platinum fell 0.1% to $984.49, and palladium was up 0.3% to $2,283.78. (Reporting by Seher Dareen in Bengaluru
Editing by Paul Simao and Vinay Dwivedi)