Gold slips on stronger dollar, yields; palladium gains

[BENGALURU] Gold prices fell on Wednesday (Mar 9), weighed down by a stronger dollar and US Treasury yields, while palladium gained on supply worries as Western countries ramped up sanctions against Russia over its invasion of Ukraine.

Spot gold was down 0.6 per cent at US$2,040.07 per ounce, as of 12.54 am GMT, after rising to US$2,069.89 in the previous session, a whisker away from a record US$2,072.49 touched in August 2020.

US gold futures were up 0.2 per cent at US$2,046.40.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to 1,067.3 tonnes on Tuesday – their highest since March 2021.

US Treasury yields surged, bouncing off 8-week lows, as Federal Reserve Chairman Jerome Powell supported raising rates this month.

The dollar index held firm near a more than 1-1/2-year high hit on Monday.

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Gold is highly sensitive to rising US interest rates, which increase the opportunity cost of holding non-yielding bullion. Higher rates also boost the dollar, pressuring the greenback-priced precious metal.

US President Joe Biden announced a ban on Russian oil and other energy imports on Tuesday, while Britain said it would phase out the import of Russian oil and oil products by 2022.

Palladium gained 2.9 per cent to US$3,272.87 per ounce.

Russia is a major producer of the auto-catalyst metal, used by automakers in catalytic converters to curb emissions.

A market authority said on Tuesday that Russian refiners can continue to sell platinum and palladium in London, a day after new Russian gold and silver bars were blocked from markets in London and New York.

Among other metals, spot silver was flat at US$26.39 per ounce, after reaching its highest in nearly 9 months in the previous session, while platinum rose 0.4 per cent to US$1,158.78. REUTERS