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Gold Prices Ease after Russia-Ukraine Ceasefire Talks

  • Spot gold may test support at $1,886/oz - technicals
  • China's PMI data for February better than expected
  • Global shares edge higher

March 1 (Reuters) - Gold prices edged lower on Tuesday after Russian and Ukrainian officials held the first round of ceasefire talks overnight, dampening demand for the safe-haven bullion.

Spot gold was down 0.1% at $1,906.00 per ounce, as of 0741 GMT. U.S. gold futures rose 0.5% to $1,909.30.

High-level talks between Kyiv and Moscow ended with no agreement except to keep talking, but Asian markets stabilised on signs of no immediate escalation of sanctions.

OANDA senior analyst Jeffrey Halley said there was a swing in risk sentiment during the New York session, which reversed much of the Ukraine panic seen on Monday in Asia and Europe trade after sanctions were ramped up on Russia over the weekend.

"Investors are, for now, less concerned that the Ukraine war will lead to a double-dip recession, (and) that has seen a rush back into equities at the expense of havens like gold," he said, adding that sentiment was also boosted by better-than-expected China data.

China's factory activity expanded slightly in February as new orders improved, pointing to some resilience in the world's second-largest economy. 

Gold, often used a safe-store of value during times of political and financial uncertainty, had risen about 6.5% in February, having soared to an 18-month high of $1,973.96 last week.

"We believe that gold may experience price volatility in either direction due to potential tactical positioning but investment demand is likely to be supported longer term by high inflation, geopolitics and overall market pullbacks," said Juan Carlos Artigas, global head of research at the World Gold Council in a note.

Auto-catalyst metal palladium gained 0.6% to $2,504.81, having reached its highest level since July 2021 at $2,711.18 last week.

Spot silver was flat at $24.42 per ounce, while platinum rose 0.5% to $1,048.58.

Reporting by Asha Sistla in Bengaluru; Editing by Subhranshu Sahu and Sherry Jacob-Phillips

Source: Reuters

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