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Market News International gold prices are under pressure, although new sanctions against Russia are imminent, the claws of the FED hawks are gradually emerging

International gold prices are under pressure, although new sanctions against Russia are imminent, the claws of the FED hawks are gradually emerging

On Tuesday (April 5), international gold prices were under pressure. Although the prospect of new Western sanctions against Russia supported gold prices, the Federal Reserve may increase interest rate hikes to control inflation, limiting the upside of gold prices. CME's "FedWatch" tool puts the probability of the Fed raising interest rates by 50 basis points in May close to 75%.

2022-04-05
9046
On Tuesday (April 5), international gold prices were under pressure. Although the prospect of new Western sanctions against Russia supported gold prices, the Federal Reserve may increase interest rate hikes to control inflation, limiting the upside of gold prices.

At GMT+8 15:26, spot gold fell 0.22% to $1928.20 per ounce; the main COMEX gold futures contract fell 0.10% to $1932.0 per ounce; the US dollar index fell 0.13% to 98.868.


The international community on Monday (April 4) expressed its outrage over the killing of civilians in northern Ukraine. Earlier, Ukraine found bound bodies shot in the vicinity, a mass grave and other signs of executions on territory it had retaken from Russian troops. Russia has denied the allegations.

German Defense Minister Rambrecht said the EU must discuss the Russian gas ban. But Deutsche Bank CEO Christian Sewing has warned that Germany faces a severe recession if it stops importing or shipping Russian gas and oil.

Edward Moya, senior market analyst at OANDA, said: “Many investors are becoming more pessimistic about a resolution to the peace talks between Russia and Ukraine. For the most part, the expectation is that the EU may have to step up its anticipation. Russia's sanctions."

Last week's strong U.S. nonfarm payrolls report for March also continued to provide support for the Federal Reserve's sharp 50 basis point rate hike at its May meeting. CME's "FedWatch" tool puts the probability of the Fed raising interest rates by 50 basis points in May close to 75%.

Ilya Spivak, currency strategist at DailyFX, said: “Real yields are still negative right now. I think that’s why gold hasn’t fallen sharply, but if expectations for a more hawkish Fed continue to strengthen and we do see yields turn positive, I think gold is going to become unattractive."

Jeffrey Halley, senior market analyst at OANDA, said gold remains stuck in a range around $1,915 to $1,950 an ounce, with no signs of a directional breakout yet. “Risks to gold remain skewed to the downside, especially if the dollar climbs. Only a break above $1,970 could temporarily change that outlook. Gold has resistance at $1,940 and $1,950 an ounce. Conversely, a confirmation of a break below $1,880 could change that outlook for the time being. Sparking a sell-off that could push gold down to $1,800 an ounce.”
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