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Metals Stocks: Gold end lower, falling from 13-month high as talks between Russia and Ukraine look to resume

Gold futures logged their first loss in three sessions Wednesday, with prices pulling back a day after settling at a 13-month high, as talks between Russia and Ukraine were poised to resume, helping to momentarily quell haven demand.

Meanwhile, in remarks prepared for congressional testimony, Federal Reserve Chairman Jerome Powell said the central bank intends to raise its policy interest rate following the end of its two-day meeting on March 16. While under questioning from lawmakers, Powell said he was inclined to support a 25 basis point move. The market is now pricing in a near-certain chance of a quarter-point increase and a 3.7% chance of a half-point rise, according to the CME FedWatch tool.

Against that backdrop, April gold
GCJ22,
-1.08%

GC00,
-1.08%

 fell $21.50, or 1.1%, to settle at $1,922.30 an ounce. A 2.3% gain on Tuesday took bullion to the highest most-active contract finish since January 2021. May silver
SIK22,
-1.16%

also lost 35 cents, or 1.4%, to $25.19 an ounce, a day after posting a 4.8% rise.

Gold and silver have seen corrections, since the start of the Russia-Ukraine war, whenever there have been talks, Chintan Karnani, director of research at Insignia Consultants, told MarketWatch. The two metals tend to see another wave of price gains once the talks fail, he said, adding that he expects the talks to fail.

Russia and Ukraine on Wednesday were ready to resume discussions aimed at stopping the war, even as Russia renews its assault on Ukraine’s second-largest city, Kharkiv, according to a report from the Associated Press.

Gold’s latest moves follow President Joe Biden’s State of the Union address where he vowed to isolate Moscow and combat inflation, which has surged in the aftermath of the COVID-19 pandemic.

Soaring commodity prices are seen adding fuel to inflation already running at a nearly 40-year high, but have also sparked fears of an economic slowdown, clouding the outlook for the Fed.

Reduced expectations for larger interest-rate increases also had helped to bolster gold somewhat.

Data from payroll processor ADP released Wednesday showed that U.S. businesses added 475,000 new jobs in February. That was more than the 400,000 increase forecast by economists surveyed by The Wall Street Journal. The private-sector employment data came ahead of the more closely followed Labor Department nonfarm payrolls later this week.

Karnani said he believes U.S. economic data releases “will fail to impact gold and silver and industrial metals, as long as the Ukraine crisis doesn’t show signs of de-escalation.”

In other Comex trading, May copper
HGK22,
+1.83%

added 1.5% to $4.666 a pound. April platinum
PLJ22,
+2.06%

rose 1.5% to $1,068 an ounce and June palladium
PAM22,
+4.70%

settled at $2,664.90 an ounce, up 5%.

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