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Spot Gold Rose slightly in early Asian trading to trade near $1,922 an ounce. Tuesday (March 15) — gold prices continued their slide as Russian-ukrainian cease-fire talks reduced demand for safe-haven assets and bets that the Federal Reserve might raise interest rates for the first time in three years added to pressure on the metal.

Spot Gold was last at $1,917.56 an ounce, down $33.03, or 1.69 percent, after hitting a daily high of $1,954.47 and a low of $1,906.85.
Comex April Gold Futures closed down 1.6 percent at $1,929.70 an ounce, the lowest close since March 2. In Ukraine, the capital Kiev has imposed a 35-hour curfew from 8pm local time after Russian missile strikes hit several residential buildings in the city. The Russians and Ukrainians held a fourth round of talks on Monday, with Tuesday continuing. Meanwhile, a debt-servicing deadline is looming. Local time Tuesday Podolyak, adviser to the Ukrainian President’s office, said the Russian-ukrainian talks would continue tomorrow and that there were fundamental contradictions in the positions of the two delegations in the talks, but there was a possibility of compromise. Ukrainian president Zelenskiy Tuesday meets with Polish Prime Minister Morawitzky, Czech Prime Minister Fiala and Prime Minister of Slovenia Jan Sha. Earlier in the day, the three prime ministers arrived in Kiev. The Polish Prime Minister’s office said on its website that the three prime ministers will visit Kiev on the same day as representatives of the European Council and meet with Ukrainian President Zelenskiy and Prime Minister Shimegal.

Gold prices rose to close to a record high of $5 last week as Russia’s invasion of Ukraine sent commodity prices soaring, threatening both low growth and high inflation, before falling back. Since then, the prices of major commodities, including oil, have fallen, easing those concerns. Gold has risen this year partly because of its appeal as a hedge against rising consumer prices. Months of speculation about a new rate rise appear to be peaking on Wednesday, when the Fed is expected to start tightening policy. The Fed will seek to curb decades of high inflation fuelled by high commodity prices. “Weak hopes that the talks between Ukraine and Russia could somehow defuse tensions have dented haven demand for gold,” said Ricardo Evangelista, senior analyst at ActivTrades. Evangelista added that, while gold prices were a little calmer, the situation in Ukraine was still developing and market volatility and uncertainty could remain high. Naeem Aslam, chief market analyst at Ava Trade, said in a note that“Gold prices have fallen over the past three days, mainly because of the fall in oil prices,” adding to some good news that inflation may be easing. Tuesday has released a report showing that the US Producer Price Index Price Index Rose strongly in February on the back of higher commodity costs, underscoring inflationary pressures and setting the stage for the Fed to raise interest rates this week.

Gold is set to fall for a third consecutive session, possibly its longest losing streak since late January. The Fed is expected to raise borrowing costs by 0.25 percentage points at the end of its two-day meeting on Wednesday. The impending announcement sent 10-year treasury yields higher and put pressure on gold prices as higher US interest rates increase the opportunity cost of holding unyielding gold. Ole Hansen, analyst at Saxo Bank, said: “The first rise in US interest rates usually means a low for gold, so we will see what signals they send tomorrow and how hawkish their statements are, which may determine the short-term outlook.” Spot Palladium rose 1.2 per cent to trade at $2,401. Palladium fell 15 per cent on Monday, its biggest drop in two years, as supply concerns eased. Hansen said Palladium was an extremely illiquid market and was not protected as the war premium in the commodities market was withdrawn. Vladimir Potanin, the largest shareholder in the main manufacturer, MMC Norilsk Nickel PJSC, said the company was maintaining exports through re-routing despite the disruption of air links with Europe and the United States. The European Union has waived its latest fine on rare earth exports to Russia.

The U. S. S & p 500 index ended a three-day losing streak, focusing on the Federal Reserve’s policy decision

U.S. stocks rose on Tuesday, ending a three-day losing streak, as oil prices fell again and U.S. producer prices rose less than expected, helping to ease investor concerns about inflation, the focus turns to the Fed’s upcoming policy statement. After Brent Crude prices rose above $139 a barrel last week, Tuesday settled below $100, providing a temporary relief to equity investors. Stocks have been weighed down this year by rising inflation fears, uncertainty about the path of the Fed’s policy to curb price rises and the recent escalation of the conflict in Ukraine. By Tuesday’s close, the Dow Jones Industrial Average was up 599.1 points, or 1.82 percent, at 33,544.34, the S & P 500 was up 89.34 points, or 2.14 percent, at 4,262.45, and the NASDAQ was up 367.40, or 2.92% to 12,948.62. The US producer Price Index surged in February on the back of petrol and food, and the war with Ukraine is expected to lead to further gains after a strong Producer Price Index in February, driven by a sharp rise in prices for commodities such as petrol, the index is expected to climb further as crude oil and other commodities become more expensive following Russia’s war in Ukraine. Final demand for producer prices rose 0.8 per cent in February from a month earlier, after rising 1.2 per cent in January. Commodity prices surged 2.4% , the biggest increase since December 2009. Wholesale petrol prices rose 14.8 per cent, accounting for almost 40 per cent of the rise in commodity prices. The producer Price Index jumped 10 per cent in February from a year earlier, in line with economists’ expectations and the same as in January. The figures do not yet reflect the sharp rise in the price of commodities such as oil and wheat following Russia’s invasion of Ukraine on February 24. PPI will generally pass on to CPI in three months’ time. The high PPI data in February in the US suggests that there is still room for CPI to rise further, which is expected to attract investors to buy gold to combat inflation, long-term interest in gold prices. However, the data added some pressure on the Fed to raise interest rates.

Speculators have sharply cut their dollar bulls this year, and foreign exchange speculators seem to be less convinced that the dollar’s rise can be stabilized for a long time, the dollar’s recent strength-driven by war-related risk-off flows and expectations that the fed will tighten policy-could gain momentum further. Leveraged funds have reduced their overall long positions against the dollar against major currencies by more than two-thirds this year, according to data from the commodity futures trading commission as of March 8. In fact, the dollar rose during the period, climbing nearly 3 percent on the Bloomberg Dollar Index, while ukraine-related risks and expectations of central bank tightening were more muted, transatlantic rivals from the euro to the Swedish krona have underperformed. Jack McIntyre, Portfolio Manager at Brandywine Global Investment Management, says that if the war in Ukraine continues to be contained and does not spread to other countries, the dollar’s support for safe-haven demand may ebb. Nor does he believe the Fed’s actual tightening measures will do much to help the dollar. He is currently underweight in dollars. “Many markets are already way ahead of the Fed,” he said. From a monetary policy perspective, historical precedents suggest the dollar may be close to its peak. According to data from the Federal Reserve and the Bank for International Settlements as far back as 1994, the dollar weakened by an average of 4.1 per cent in the four previous tightening cycles before the federal open market committee.

Englander said he expected the Fed to signal a cumulative increase of between 1.25 and 1.50 percentage points this year. This is lower than many investors currently expect. The median analyst estimate also suggests the Fed will raise its target fed funds rate from its current near-zero level to a range of 1.25-1.50 per cent by the end of 2022, equivalent to five 25 basis point rises. Futures contract investors linked to the target federal funds rate now expect the Fed to raise borrowing costs at a slightly faster pace, with the policy rate set to be between 1.75 per cent and 2.00 per cent by year-end. Since the start of covid-19, the Fed’s forecasts for the U. S. economy have not kept pace with what is actually happening. Unemployment is falling faster, growth is accelerating faster and, perhaps most notably, inflation is surging much faster than expected.