Gold flat as firmer dollar counters support from Ukraine crisis

[BENGALURU] Gold prices remained trapped in a tight range on Friday (Apr 8) as the dollar firmed on prospects of aggressive interest rate hikes by the US Federal Reserve, partially offsetting safe-haven demand fuelled by the lingering Russia-Ukraine conflict.

Spot gold was flat at US$1,933.19 per ounce, as of 1.28 am GMT. US gold futures were unchanged at US$1,937.80.

The metal has gained nearly 0.5 per cent so far in the week.

The US dollar climbed to a near 2-year high against a basket of currencies and was set for its best weekly gain since early-March, backed by hawkish remarks from several Federal Reserve policymakers who are calling for a faster pace of interest rate increases to curb rapid inflation.

A stronger dollar makes gold less attractive for other currency holders.

Minutes of the Fed's Mar 15-16 meeting showed deepening concern among policymakers that inflation had broadened through the economy, with many participants prepared to raise rates in 50-basis-point increments in coming months.

The benchmark US 10-year Treasury yield touched a 3-year high in the previous session, increasing the opportunity cost of holding non-yielding bullion.

The Ukraine crisis, however, lifted bullion's appeal as an inflation hedge and a safe-haven asset through the week.

Russia gave the most sombre assessment so far of its invasion of Ukraine, describing the "tragedy" of mounting troop losses and the economic hit from sanctions, as Ukrainians were evacuated from eastern cities before an anticipated major offensive.

Russia's central bank said due to a "significant change in market conditions" it would buy gold from commercial banks at a negotiated price from Apr 8.

Spot silver edged 0.2 per cent higher to US$24.63 per ounce.

Platinum was up 0.2 per cent at US$964.39 and palladium rose 1 per cent to US$2,255.31. However, both metals were set for a fifth consecutive weekly loss. REUTERS