Gold prices fell to their lowest level in nearly a week on Tuesday, driven by a stronger dollar that overshadowed any safe-haven demand amid lower equities and heightened tensions over Ukraine. Palladium, on the other hand, hovered near a 13-1/2 year high due to fears that potential Western sanctions on Russia could disrupt the global supply.
Silver also tracked gold’s downward trend as the dollar hit a seven-month peak against the yen and remained near a one-year high against the euro. Precious metals traders are concerned about the impact of the upcoming European Central Bank policy meeting and U.S. non-farm payrolls data on gold prices.
Despite ongoing Ukraine tensions, gold struggled to stay above $1,300, prompting worries among investors. One Hong Kong-based bullion trader noted that people are anxious about the strength of the dollar and predicted a tight trading range for gold until the ECB and non-farm payrolls reports are released.
In the market, spot gold declined 0.5 percent to $1,281.20 an ounce, reaching its lowest level since August 27. Investors are closely watching the ECB meeting for indications of the bank’s response to economic challenges in the eurozone, as well as the impact of U.S. economic data on Federal Reserve policy.
Meanwhile, palladium continued its upward trend, reaching $903.97 per ounce, amid concerns that potential sanctions on Russia could disrupt global palladium supply. With Russia accounting for over 40 percent of global palladium production, any disruptions in supply could significantly impact the market.
Despite the ongoing Ukraine crisis, a stronger dollar and economic uncertainties have outweighed safe-haven buying in the precious metals market. Investors are closely monitoring geopolitical developments and economic indicators for further market direction.
