Gold slides down its eight-month high, after apparent descalation of Russia-Ukraine crisis

Gold prices declined from its multi-month peak while palladium slipped about 3% as news about Russian troops near Ukraine border returning to their bases. Reuters reports that spot gold was down 0.8% at $1,854.50 per ounce, after hitting its highest level since June 11 at $1,879.48 an ounce. U.S. gold futures fell 0.7% to $1,857.

In the absence of the geopolitical conflict, if bullion holds above the $1,850 level, it is a bullish signal.  Some troops in Russia’s military districts adjacent to Ukraine were returning to their bases after completing drills, Russia’s defence ministry was quoted as saying on Tuesday, driving a rebound in European equities.

Caught in gold’s slipstream, spot silver fell 2% to $23.35 per ounce, platinum was down 0.9% to $1,018.85, and palladium dipped 2.4% to $2,303.11.

Palladium has seen sharp rallies of late, having logged its best month in 14 years in January, with analysts flagging a possible disruption to supply from key producer Russia if the Ukraine conflict escalates.

Market participants also kept a tab on the U.S. Federal Reserve’s rate hike plans, with officials continuing to spar over how aggressively to begin upcoming rate increases at their March meeting, with a final inflation reading just ahead of the two-day session taking on potentially outsized importance.

In India too gold prices had peaked to a 12-month high, as geopolitical tensions increased safe-haven appeal. Gold prices were last seen at current levels in January 2021. On Monday, ten grams of 24-carat gold was selling at Rs 51,060, increasing by Rs 10 since the last trade. In tandem with the global cues, gold prices in India fell by Rs 550 per 10 grams to sell at Rs 50,510 per 10 gms for 24 carat metal. The 22 carat gold price also slid down by Rs 510 per 10 gms to sell at Rs 46,300 per 10 gms. Silver prices, however, spiked by Rs 800 a kg in a day to touch Rs 63,800 per kg. 

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