Gold slips as dollar firms, investors focus on Ukraine conflict

[BENGALURU] Gold prices dipped in early Asian trade on Wednesday (Mar 2), as the dollar ticked higher, outweighing safe-haven demand fuelled by the intensifying Russia-Ukraine conflict.

Spot gold was down 0.4 per cent to US$1,935.38 per ounce by 1.46 am GMT. US gold futures also fell 0.4 per cent to US$1,936.50.

The metal rose about 6.5 per cent in February, hitting an 18-month high of US$1,973.96 last week.

The dollar index held close to a 20-month high touched on Tuesday, making gold less attractive for holders of other currencies.

Ukraine's besieged cities were bracing for more attacks on Wednesday, as Russian commanders facing fierce Ukrainian resistance intensify their bombardment of urban areas in a push toward the capital Kyiv.

Russian and Ukrainian negotiators met over a ceasefire on Monday but talks broke down with no further rounds yet announced.

The steady drum beat of US companies taking a stance increased as rockets struck major cities in Ukraine.

Gold is considered a safe store of value during times of such uncertainties and also a hedge against higher inflation.

Investors are awaiting Federal Reserve Chairman Jerome Powell's testimony before the US Congress on Wednesday and Thursday for more clarity on interest rate hikes amid the Ukraine tensions and soaring inflation.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 1.3 per cent to 1,042.38 tonnes on Tuesday - their highest since July 2021.

Auto-catalyst metal palladium rose 1.2 per cent to US$2,612.18, after hitting a seven-month peak of US$2,722.79 on Tuesday.

Russia is the biggest producer of palladium, with Moscow-based Nornickel accounting for 40 per cent of the metal's global mine production last year.

Spot silver fell 0.9 per cent to US$25.15 per ounce, while platinum was up 0.1 per cent to US$1,053.79. REUTERS