Gold drops as lower oil, global cues help risk appetite – Reuters.com

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  • Global shares track Wall Street gains
  • U.S. CPI data due at 1330 GMT

March 10 (Reuters) – Gold prices extended declines on Thursday after recording their worst drop in nearly 14 months in the previous session as a retreat in oil prices and planned diplomatic talks between Russia and Ukraine boosted risk appetite.

Spot gold fell 0.5% at $1,981.80 per ounce by 0809 GMT after tumbling as much as 3% on Wednesday. U.S. gold futures shed 0.4% to $1,980.90.

“Suspect there are still plenty of long positions put on in the last couple of days out there that are still being squeezed. With no new Ukraine headlines to chance the dynamic, and with equities rallying strongly in Asia, the downward pressure on gold continues,” said OANDA senior analyst Jeffrey Halley.

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A rush to safe-haven assets due to the Ukraine crisis has led to a rally in gold prices, which have jumped about 8.5% in the last two weeks, bringing them closer to their record levels hit in August 2020.

Asian shares surged, tracking Wall Street’s overnight gains as planned diplomatic talks between Russia and Ukraine buoyed sentiment.

However, “with Russia being a major commodity producer, sanctions are intensifying the stagflation risk. We believe heightened geopolitical risks and higher inflation will support gold prices,” said ANZ analysts in a note.

A steep rise in oil and other commodities has sparked concerns about a further jolt to rising inflation and the potential for slowing economic growth.

Investors now await the February U.S. consumer price index data later in the day, ahead of the Federal Reserve’s next policy statement on March 16.

Palladium , used by automakers in catalytic converters to curb emissions, slipped 1.4% to $2,897.62 per ounce. The metal hit a record high of $3,440.76 on Monday, driven by fears of supply disruptions from top producer Russia. read more

Among other metals, spot silver fell 0.7% to $25.55 per ounce, while platinum shed 0.4% to $1,071.23.

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Reporting by Asha Sistla in Bengaluru; Editing by Rashmi Aich, Uttaresh.V and Anil D’Silva

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