IGI Logo

Gold prices edged higher on Monday, as the war in Ukraine and risk-off sentiment in wider stock markets bolstered safe-haven demand for the metal, although elevated U.S. Treasury yields after strong March jobs data limited bullion's gains.

Spot gold XAU= was up 0.1% at $1,926.56 per ounce by 0946 GMT. U.S. gold futures GCv1 rose 0.4% to $1,930.70.

"We haven't seen any progress in the peace talks and negotiations between Russia and Ukraine, so we have seen a modest return of the risk-off scenario, which is lifting gold prices," said Carlo Alberto De Casa, an external market analyst at Kinesis.

"Gold price is moving in a lateral trading range... The first directional signal would arrive only when gold can jump above $1,950 or fall below $1,900."

Ukraine accused Russia of war crimes, overshadowing their peace talks due on Monday. Meanwhile, Germany said the West would agree to impose more sanctions on Moscow, causing share markets to turn cautious. (Full Story) (Full Story) MKTS/GLOB

Further gains in the bullion were, however, capped as Friday's solid jobs report for March cemented expectations of bigger interest rate hikes by the U.S. Federal Reserve.

The dollar index =USD was buoyed as U.S. two-year Treasury yields climbed to their highest since early 2019. USD/ US/

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.

Investors are looking forward to any discussion of a 50 basis point rate hike when the Fed releases minutes from its March meeting on Wednesday.

"Hawkish Fed pricing and rhetoric to damp inflation, though a cap on gold cheer to a degree, can support the narrative for a 'slower growth risk' bullion bid for the time being," Citi Research said in a note.

Spot silver XAG= gained 0.4% to $24.71 per ounce, platinum XPT= rose 0.4% to $989.81, and palladium XPD= jumped 2.1% to $2,324.16.