Gold slips ahead of Ukraine-Russia peace talks

[BENGALURU] Gold prices fell on Monday (Mar 28) as hopes of progress in Russia-Ukraine peace talks to be held this week dented safe-haven demand for bullion, while a stronger US dollar and higher yields further weighed on the metal.

Spot gold fell 0.5 per cent to US$1,947.90 per ounce, as of 1.51 am GMT. US gold futures were down 0.2 per cent at US$1,949.70.

With peace talks between Russia and Ukraine set to take place in Turkey this week, Ukrainian President Volodymyr Zelensky insisted on the territorial integrity of his country after earlier suggesting he was ready for a compromise.

The Russian central bank will restart buying gold from banks and will pay a fixed price of 5,000 roubles (S$67) per gramme between Mar 28 and Jun 30, the bank said on Friday.

US Treasury yields rose on Friday, with the benchmark 10-year note surging to nearly 3-year highs as markets grapple with high inflation and a hawkish US Federal Reserve.

Higher yields and interest rates reduce the opportunity cost of holding non-yielding bullion.

The dollar index hit a more than 1-week high, making gold less expensive for other currency holders.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.5 per cent to 1,093.18 tonnes on Friday, their highest since late-February 2021.

High bullion prices led some people to sell old jewellery in India last week amid dim physical gold demand, while a resurgence in Covid-19 cases in China hit purchases of the metal in the country.

China's financial hub of Shanghai launched a planned 2-stage lockdown of the city of 26 million people on Monday to contain surging local Covid-19 cases.

Spot silver fell 1.2 per cent to US$25.21 per ounce and platinum shed 0.8 per cent to US$993.59, while palladium added 1.3 per cent to US$2,366.12. REUTERS