Gold prices extended losses on Tuesday (March 15) as cease-fire talks between Russia and Ukraine dented safe-haven demand, while the US Federal Reserve forecast possibly raising interest rates for the first time in 3 years has increased pressure on precious metals.
Closing Tuesday’s session, the spot gold contract dropped 1.8% to $1,916.01 an ounce. Gold futures lost 2.2% to $1,917.7 an ounce.
“Some faint hope that negotiations between Russia and Ukraine could somehow lead to a de-escalation has impacted safe-haven demand for gold,” said ActiveTrades senior analyst Ricardo Evangelista.
While gold falters a bit, the situation in Ukraine continues, with market volatility and uncertainty remaining at a fairly high level.
Gold prices have fallen for the third consecutive session, this is the longest series of declines since the end of January 2022.
The Fed is expected to raise interest rates by 0.25 percentage points at the end of its two-day meeting on March 16.
The impending announcement has lifted 10-year US Treasury yields and put pressure on gold, as higher interest rates will increase the opportunity cost of holding non-yielding gold.
Meanwhile, the palladium contract added 0.7 percent to $2,433.50 an ounce, after falling sharply on March 14 as supply concerns eased.