Gold price slides on hopes of progress in Ukraine peace talks

Spot gold fell 1.4% to $1,955.43 per ounce by 11:40 a.m. ET, still maintaining a six-month high. US gold futures were also down 1.4%, trading at $1,957.80 per ounce on the Comex.

Meanwhile, benchmark US 10-year Treasury yields saw a slight bump with the anticipation of a Federal Reserve rate hike this week, adding further pressure to the non-yielding bullion.

While there is a risk-on mood across major markets, “I wouldn’t call this (the recent rally) the peak in gold just yet, because this (Ukraine) situation is still uncertain. It’s so fluid,” Julius Baer analyst Carsten Menke told Reuters.

Short-term speculative traders who bought gold due to the war were now possibly booking profits, Menke added.

Elsewhere, palladium had a more dramatic drop as concerns of a supply shortage eased. The precious metal used in catalytic converters was down 11.8% to $2,412.84 per ounce, after recently hitting record highs.

“Palladium over-reacted in the first place,” StoneX analyst Rhona O’Connell said. “The rally we’ve seen has been built on straw, rather than on concrete.”

There was no clear supply disruption and very little industrial demand, she added.

Reporter: Naghme Shafiei Dero'ei