Gold Up, but Russia-Ukraine Ceasefire Talks and Western Sanctions Dulls Appeal

© Reuters

By Gina Lee

Investing.com – Gold was up on Tuesday morning in Asia, easing after strong performances over the last few sessions. The start of ceasefire talks between Russian and Ukrainian officials and Western countries slapping even more sanctions against Russia dampened the demand for the safe-haven yellow metal.

Gold futures were up 0.30% to $1,906.45 by 11:20 PM ET (4:20 AM GMT), after gaining more than 1% during the previous session.

Russian and Ukrainian officials began ceasefire talks near the Belarusian border four days after Russia invaded its neighbor. However, there are no signs that Russia intends to stop the invasion.

The Central Bank of the Russian Federation (Bank of Russia) hiked its key policy rate to 20% on Monday and introduced some capital controls. However, governor Elvira Nabiullina said sanctions had prevented the central bank from selling foreign currency to prop up the rouble.

The number of Western companies pulling out of Russia is expected to grow, with companies such as BP (NYSE:BP) and Shell (LON:RDSa) already taking the lead.

In Asia Pacific, Chinese data released earlier in the day showed that the manufacturing purchasing managers index (PMI) for February was 50.2, while the non-manufacturing PMI was 51.6. The Caixin manufacturing PMI was 50.4.

In central bank news, the Reserve Bank of Australia kept its interest rate steady at 0.10% as it handed down its latest policy decision earlier in the day. The Bank of Canada hands down its policy decision on Wednesday, while the European Central Bank will also release the minutes from its February 2022 meeting a day later.

Meanwhile, holdings of SPDR Gold Trust (P:GLD) edged up 0.2% to 1,029.02 tons on Monday. In other precious metals, palladium edged up 0.2% to $2,494.00, after hitting its highest level since July 2021 at $2,711.18 during the previous week. Silver fell 0.5% and platinum edged down 0.2%.