Gold prices up but Ukraine worries linger

Gold prices up but Ukraine worries linger

On Wednesday, the price of the metal went up, supported by a dip in the U.S. dollar and Treasury yields, although signs of progress in Russia-Ukraine peace talks dented the appeal as a safe haven and kept gains in check.

Spot was up 0.3% to $1,923. 95 per ounce was available at 0210 GMT. The U.S. futures rose by 0.5% to $1,927. The metal fell by as much as 1.8% on Tuesday to its lowest since Feb. 28 at $1,889. The weaker dollar has provided a level of support for gold. Bond prices bounced back from a key level of support yesterday, which helped push yields lower despite the potential risk-on rally seen across equities. Senior market analyst Matt Simpson said that the city index provided another pillar of support for gold.

Underpinning gold, investors remain wary of Russia's intentions over their pledge to scale down'military operations', he added.

Ukraine reacted with scepticism to Russia's promise to scale down military operations around Kyiv and another city, as some Western countries expected Moscow to intensify its offensive in other parts of the country.

The dollar index fell to a more than one-week low in the previous session, making gold less expensive for other currency holders. The US benchmark 10-year yields also fell from near three-year highs, and lower yields decrease the chance of holding non-yielding bullion. The US holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust, fell 0.2% to 1,091. On Tuesday, 44 tons were produced. GOL ETF Spot was up 0.1% at $24.78 per ounce and platinum rose 0.9% to $991.49.

Palladium rose by 1.5% to $2,182. After reaching a two-month low of $2,032, the 15-month low was a more than two-month low. The auto-catalyst metal has tumbled nearly 40% since scaling an all-time peak on March 7 due to supply concerns from Russia.