Gold prices have stabilised after surging over the past two days, with investor sentiment towards the precious metal cooling slightly ahead of a potential US-Russia meeting over Ukraine next week.
US Secretary of State Antony Blinken has agreed to hold talks with Russia’s foreign minister Sergei Lavrov, boosting hopes of an end to the standoff in Eastern Europe.
Prices had rallied with three successive weeks of gains, and remain elevated after months of treading water – even if they have dipped to $1,896 after breaching $1,900 this morning.
Gold is still en-route to a weekly gain of around 1.6 per cent.
Michael Hewson, chief market analyst at CMC Markets UK, expected gold to consolidate its gains but was unsure if prices could rise significantly further.
He said: “The outlook for gold does look a lot more positive, but it’s going to be really difficult to get back above those June peaks. We might find it trading between $1,910 and roundabout $1,870 over the next few days.”
Commerzbank was more bullish about the precious metal, suggesting raised prices reflect investor anxiety, with gold a key flight-to-safety asset.
Daniel Briesemman explained: “The need for safety among market participants still appears considerable against the backdrop of the Ukraine crisis, meaning that gold remains in demand as a safe haven.
Rupert Rowling, market analyst at Kinesis Money noted that gold has struggled to make breakthroughs despite stock market volatility, and was seemingly weighed down by inflation and interest rate hikes.
He said: “It will be interesting to see the price reaction if gold does break through the $1,900 ceiling as for much of the last few months, the precious metal has failed to make significant gains despite a falling stock market. The real threat of war breaking out in Ukraine seems to have finally given gold the push it needed.”