Gold higher as Russia-Ukraine war enters second month

President Joe Biden met Thursday with leaders of the North Atlantic Treaty Organization, the first of a series of meetings with European allies and other world leaders in response to Russia’s Feb. 24 invasion of Ukraine. Biden and U.S. allies are expected to roll out further rounds of sanctions against Moscow.

“The brutal reality of war in Ukraine continues on the ground but a sense of it getting closer to de-escalation, even if only temporarily, has been rising in the markets” said Ricardo Evangelista, senior analyst at ActivTrades, in a note.

“As the safe-haven trade that propelled the price of the precious metal to above $2,000 per ounce earlier in the month eases, traders’ expectations over what the Fed will do over the next few months comes once again under the spotlight,” he said.

Fed officials this week have signaled they’re prepared to raise rates even more quickly than previously expected. Fed Chairman Jerome Powell on Monday said the Fed could move rates up by more than a quarter point at future meetings if deemed necessary. Other Fed officials have echoed Powell, pushing up expectations for a half-point increase at the next policy meeting in May.

“The latest signs emanating from the U.S. central bank point at a strong determination to bring inflation under control, with interest rates likely to rise quickly; a scenario that, in the absence of fresh geopolitical concerns, will be likely to weigh on gold prices,” Evangelista said.