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Metals Stocks: Gold ends lower for the session, up for the week as investors weigh Ukraine-Russia conflict developments

Gold futures traded lower on Friday but eyed a gain for the week, as Russian President Vladimir Putin implied progress in talks on the conflict in Ukraine and a U.S. move to revoke Moscow’s special trade status tugged at the precious metal’s appeal as an investment safe haven.

“There are certain positive shifts, negotiators on our side tell me,” Reuters quoted Putin as saying, in a meeting with Alexander Lukashenko, the president of Belarus.

The Russia president’s remarks come even as Moscow’s siege of Kyiv enters a third week and has widened its bombing campaign into western Ukraine.

“The geopolitical risk premium in gold fades reasonably quickly,” wrote Stephen Innes Managing Partner at SPI Asset Management, in a Friday note. However, the “great unknown this time is the longer-term impact of higher commodity prices,” as sanctions on Russia could further disrupt supply chains.

Gold prices pared their losses following news that the U.S. and its international partners will move to revoke Russia’s “most favored nation” trade status, which would lead to higher tariffs on Russian goods.

April gold
GCJ22,
-0.34%

was trading $8.70, or 0.4%, to $1,991.70 an ounce, after gaining 0.6% on Thursday. Friday’s downdraft comes after futures
GC00,
-0.34%

settled Tuesday at $2,043.30, their highest in about 19 months—teasing a record settlement high of $2,069.40 from Aug. 6, 2020.

So far, prices for the most-active contract are up more than 1% for the week, FactSet data show.

May silver
SIK22,
+0.34%

turned higher, up 6.4 cents, or 0.2%, at $26.32 an ounce, eying a weekly advance of 2%.

“It has been another explosively volatile week for gold as the risk pendulum swings back and forth,” Lukman Otunuga. manager, market analysis at FXTM, told MarketWatch. “The precious metal remains highly sensitive to geopolitical uncertainty concerning Ukraine, while other themes in the form of rising inflation and growth concerns had added to the volatility.”

Overall, analysts are anticipating that gold will maintain a bullish, albeit volatile, trend, as rising U.S. and E.U. inflation continues to weigh on investors’ minds and fears grow that price pressures haven’t yet peaked.

The U.S. consumer-price index hit a 7.9% annual rate in February, according to data released on Thursday, with the surge in the cost of living in the past 12 months the biggest since January 1982. The consumer-price index rose 0.8% in the month. The data doesn’t yet reflect the impact of higher prices from the war in Ukraine that is disrupting supplies of oil, metals and grains.

On Friday, a reading of the University of Michigan’s gauge of consumer sentiment fell to an initial March reading of 59.7 from February’s level of 62.8. Expectations for inflation over the next year rose to 5.4% from February’s expectation of 4.9%, the highest level since 1981.

In other Comex trading, May copper
HGK22,
-0.30%

shed 0.2% to $4.643 an ounce, trading 6% lower for the week. April platinum
PLJ22,
-0.13%

added 0.2% to $1,096.80 an ounce, poised for a weekly loss of around 1.8%.

June palladium
PAM22,
-4.18%

traded at $2,795 an ounce, down 4.3% in Friday dealings, and down over 6% for the week. Prices settled at a record high on March 4.

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