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Gold spot rallied closer to its all-time high and soon retreated on strengthening US dollar and on hopes of Russia - Ukraine talks after Russian President Vladimir Putin commented “there are certain positive shifts”

Global Economy

Global equity gauges displayed mixed signals in the last week amid prevailing geopolitical tensions and inflation fears.

Russian and Ukrainian officials gave their most upbeat assessments on the progress in their talks, suggesting there could be positive results sooner.

US inflation rate accelerated to 7.9 percent in February of 2022, the highest in 40 years due to soaring energy costs, labour shortages, and supply disruptions.

China's inflation rate stood at 0.9 percent in February 2022, unchanged from the previous month.

Gold

Gold prices rallied near to its all-time high hit in August 2022 last week and retreated.

LBMA spot gold gained 0.86 percent, COMEX gold futures gained 0.90 percent in the last week.

Global gold ETFs drew net inflows of 35.3 tonnes equivalent of USD 2.1 billion or 1.0% of asset under management in February.

Outlook

International Gold:

Although the ongoing tensions between Russia and Ukraine continues to support gold’s safe haven appeal, a strong US dollar and firm treasury yields likely to moderate its bullish outlook in the near future. Hopes of a ceasefire between those countries also induce a correction in prices. Meanwhile, investors may take a cautious approach ahead of the US Federal Reserve policy meeting. The Fed had earlier signalled that there will be a few rate hikes in 2022 starting from March. However, increased inflation figures may weigh the central bank to adjust the rates sooner, that usually support gold like commodities

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