Geopolitics Weighs on Gold as Tensions Escalate Between Ukraine and Russia
Gold prices have retreated from their six-week lows near $4,235 as geopolitical tensions escalate, causing investors to turn cautious and favor the US Dollar.
The conflict between Ukraine and Russia has intensified, with a large-scale drone and missile attack on Moscow and its surrounding region over the weekend, raising concerns about a possible escalation by Russia in the coming months.
Tensions are also rising in the Middle East as Trump considers 'wiping Iran out' after attacks on Riyadh by Houthi rebels, while US Treasury bond yields have risen amid a hawkish Federal Reserve interest rate outlook, lifting the Greenback at the expense of non-yielding assets like Gold.
Strategists at DBS note that oil prices are easing due to reports that China has requested Iran to help rein in Houthi attacks on behalf of the Saudis, which could alleviate some immediate supply concerns and impact Gold prices.