Gold off 8-month highs as investors monitor Ukraine crisis

Gold prices eased in volatile trade on Monday even as doubts over a potential summit between the U.S. and Russian presidents to discuss Ukraine kept bullion supported near an eight-month high reached earlier.

Spot gold had fallen 0.2 per cent to $1,894.48 per ounce by 1348 GMT, down from a session high of $1,908.03, its best level since June 3. U.S. gold futures fell 0.1 per cent to $1,897.40.

Equity markets slipped after the Kremlin on Monday said there were no concrete plans for a summit over Ukraine between U.S. President Joe Biden and Russian President Vladimir Putin.

The headlines coming from Ukraine over the last few hours have strongly contributed to gold paring its earlier losses as risk appetite has slipped once more, said Craig Erlam, senior market analyst at OANDA.

“We are seeing some resistance around $1,900 but the way the situation is evolving, that may struggle to hold as the day progresses.”

A summit is expected to offer a possible path out of Europe’s biggest military crisis in decades. The U.S. dollar slipped, limiting losses in the greenback-priced bullion.

“(Gold) is holding up well. The last time we moved up to these levels it ended up being a bull trap and the market came off very sharply. We’ve seen some good flows into the ETFs, which is encouraging,” independent analyst Ross Norman said.

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.5 per cent on Friday.

“The next few days will be key in determining whether fears over Ukraine can outweigh the encouraging data on the economic front as well as the likelihood of a series of interest rate hikes this year by central banks,” analysts at Kinesis Money said.

Silver fell 0.7 per cent to $23.79 per ounce, platinum was up 0.8 per cent to $1,076.12, while palladium rose nearly 1 per cent to $2,368.18. -Reuters