International gold prices generally held steady on Tuesday, although US 10-year Treasury yields hit a multi-year high after Federal Reserve Chairman Colin Powell took an aggressive stance on inflation. but the growing conflict between Russia and Ukraine continues to support safe-haven gold.
Spot gold fell 0.02% to $1934.70 / oz at 15 26 Beijing time; the main COMEX gold contract rose 0.34% to $1936.1 / oz; and the dollar index rose 0.41% to 98.897.
The yield on the benchmark 10-year bond jumped above 2.3 per cent for the first time since may 2019. Jeffrey Halley, a senior analyst at OANDA, said: "Today, there is no new investment in Asia to substantially boost gold prices, putting gold prices between higher US bond yields and rising risk aversion."
Fed Chairman Colin Powell said the Fed must act "quickly" to curb excessive inflation. He added that the Fed would raise interest rates by more than usual if necessary. While the Fed is unlikely to tighten monetary policy in normal times to address the fact that commodity prices may end up soaring only temporarily, "the risk that stubbornly high inflation could push up long-term expectations is rising."
Russia demanded that Ukraine abandon Mariupol, an ultimatum that Ukraine rejected on Monday, exacerbating the conflict. Europe says it is prepared to do more than existing sanctions to isolate Russia from global finance and trade.
EU foreign ministers were divided on Monday over whether and how to impose sanctions on Russia's energy industry over its invasion of Ukraine. Germany said the EU was too dependent on Russian oil to make a decision to impose an embargo.
Nicholas Frappell, global general manager of ABC Bullion, said: "Ukraine (the conflict) is likely to continue and increase supply chain tensions and inflationary pressures to support gold."
Atlanta Fed Chairman Bostick said on Monday that he expects to raise interest rates six times this year and twice in 2023, less than most Fed officials predicted. Bostick is also worried about the impact of Russia's invasion of Ukraine on the U.S. Economy.
