(Investing.com) – Gold was down on Monday morning in Asia, with the resumption of peace talks between Ukraine and Russia denting the yellow metal’s safe-haven appeal. Stronger U.S. dollar and higher yields also weighed on gold.
Gold futures fell 0.54% to $1,943.6 by 1:04M ET (5:04 AM GMT). The dollar, which normally moves inversely to gold, was up on Monday morning.
U.S. Treasury yields rose on Friday, with the benchmark 10-year note climbing to nearly three-year highs as investors continue to weigh high inflation and a hawkish U.S. Federal Reserve.
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Meanwhile, in the Asia Pacific, Japanese deputy chief cabinet secretary Seiji Kihara said on Sunday that the country’s monetary policy must remain loose.
While the Bank of Japan did not step in to defend its target on Friday, it offered to buy unlimited amounts of 10-year Japanese government bonds (JGBs) at 0.25% on Monday morning, after the 10-year JGB yield rose to a six-year high of 0.245%.
Ukraine and Russia will resume peace talks within the week to resolve the conflict that was accentuated by Russia’s invasion of Ukraine on Feb. 24. Ukrainian President Volodymyr Zelenskiy insisted on his country’s territorial integrity, after suggesting earlier that he was ready for a compromise.
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The Central Bank of the Russian Federation, or the Bank of Russia, will resume buying gold from banks and will pay a fixed price of 5,000 roubles ($48.94) per gram between March 28 and June 30, it said on Friday.
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Holdings of the SPDR Gold Trust (P:GLD) rose 0.5% to 1,093.18 tons on Friday, the highest since late February 2021.
High prices led some people to sell old jewelry in India during the previous week amid weak physical gold demand. The latest COVID-19 outbreak in China also hit purchases of metal in the country, with the city of Shanghai entering a two-stage lockdown on Monday.
In other precious metals, silver fell 1.2% and platinum fell 0.8%, while palladium rose 1.3% to $2,366.12.