By Asha Sistla
(Reuters) – Gold prices rose on Monday, lifted by demand for the safe-haven metal as the Ukraine crisis showed no signs of abatement, although the gains were capped by the U.S. Federal Reserve’s plan of aggressive measures to combat inflation.
Spot gold rose 0.2% to $1,924.45 per ounce by 0712 GMT. U.S. gold futures were down 0.3% at $1,924.00.
“A little bit of safe-haven flows (are) going into gold today because Ukraine officially rejected the deadline from Russia,” said Matt Simpson, senior market analyst at City Index.
Ukraine on Monday rejected Russian calls to surrender the port city of Mariupol, where residents are besieged with little food, water and power and fierce fighting shows little sign of easing.
Preventing further gains in the metal, two of the Fed’s most hawkish policymakers said on Friday the central bank needs to take more aggressive steps to combat inflation.
Minneapolis Fed President Neel Kashkari said he wants to raise rates to 1.75% to 2% this year, according to an essay published on the regional Fed bank’s website.
Higher interest rates tend to raise the opportunity cost of holding non-interest paying gold.
Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose 0.8% to 1,082.44 tonnes on Friday — a high since March 2021.
Palladium, used by automakers in catalytic converters to curb emissions, gained 2.8% at $2,560.71 per ounce. It had hit a record high of $3,440.76 on March 7, driven by fears of supply disruptions from top producer Russia.
The auto-catalyst metal is responding better to the events unfolding in Ukraine, “because with Ukraine officially saying no to Russia, it puts peace talks on the back foot and of course that brings further concerns over supplying constraints moving forward,” Simpson added.
Spot silver was flat at $24.96 per ounce, platinum rose 0.4% to $1,025.83.
(Reporting by Asha Sistla in Bengaluru; editing by Uttaresh.V)
