By Asha Sistla

(Reuters) – Gold prices were steady Tuesday, as U.S. Treasury yields reached multi-year highs after an aggressive inflation stance taken by the Federal Reserve Chairman. While an intensifying conflict between Russia-Ukraine supported gold bids for this safe-haven metal.

By 0733 GMT, the price per ounce had remained unchanged at $1933.40 U.S. prices were 0.3% higher at $1,935.90

Jeffrey Halley, OANDA Senior Analyst said that “there are not new inputs to materially change the price in Asia right now.” He added that gold is stuck between high yield U.S. yields as well as a rise in risk-aversion.

Jerome Powell, Fed chairman, stated that the U.S. central banks would increase interest rates in greater than usual amounts to lower inflation.

The benchmark 10-year Treasury note yield climbed above 2.3%, the highest since May 2019. A closely monitored gap between two- and three-year rates flattened further. This could be a sign of economic decline.

Market experts say sharp (OTC) movements in U.S. Treasury markets are increasingly pointing towards a potential recession. The market is doubting the Fed’s plans to create a soft landing for the economy by raising interest rates to combat inflation.

The opportunity cost to hold non-interest bearing gold at a lower yield and higher interest rates is likely to rise.

The slowing of gold’s decline was Ukraine’s Monday comment that it wouldn’t obey Russian ultimatums after Moscow asked it to stop defending Mariupol. (Full Story)

Nicholas Frappell (global general manager, ABC Bullion) stated, “Ukraine’s conflict is likely to continue increasing supply-chain tensions, inflation pressures, and supporting gold.”

The price of palladium (used by automakers to create catalytic converters for reducing emissions) fell 0.6% per ounce to $2,568.68

Spot gold rose 0.2% to $25.24/ounce while platinum was flat at $1.036.56