Gold Prices Dive From 8-Month High As Russia-Ukraine Tension Mounts

Gold prices went down on Monday as markets remain at a standstill over the Russian-Ukraine crisis. A potential reunion between U.S. President Joe Biden and his Russian counterpart Vladimir Putin has done little to snuff out investors’ fears.

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Gold Prices Fall

As reported by Reuters, spot gold was knocked from a session peak of $1,908.03 —the highest since June 3— to $1,895.06 per ounce by 1544 GMT, marking a drop of 0.2%, while U.S. gold futures also decreased 0.2% to $1,895.70.

“European financial markets tumbled at signs of increased confrontation, after having briefly edged higher on a glimmer of hope that a summit might offer a path out of Europe’s biggest military crisis in decades.”

Craig Erlam, senior market analyst at OANDA, said that the Ukraine situation is central to gold’s lower price as investors are losing their appetite for risk.

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

Holding Up

In order to unscramble one of Europe’s largest geopolitical crises, a reunion between Joe Biden and Vladimir Putin is on the cards, while the U.S. dollar tumbled, “limiting losses in the greenback-priced bullion.”

Independent analyst Ross Norman said, “(Gold price) 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.”

On Friday, holdings of SPDR Gold Trust —the biggest gold-backed ETF in the world— jumped by 0.5%.

Kinesis Money analysts said, “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.”