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Gold Up as Powell Takes More Aggressive Stance, Ukraine Conflict Continues -Breaking

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© Reuters

By Gina Lee

Investing.com – Gold was up on Tuesday morning in Asia, as U.S. Treasury yields hit multi-year highs. The Chairman of the U.S. Federal Reserve took a more cautious stance regarding inflation while the continuing conflict in Ukraine gave this asset an additional boost.

By 12:58 PM ET (or 4:58 AM GMT), they were up 0.3% to $1,937

Jeffrey Halley from OANDA, senior analyst at OANDA, told Reuters: “There are not new inputs that materially move price in Asia today. That leaves gold stuck between higher U.S. yields a and a ramp up in risk-aversion emotion.”

Powell said that the Fed could raise interest rates at greater levels than normal if it needed to lower “much, too high” inflation.

Christine Lagarde, President of the European Central Bank will address the BIS Innovation Summit later that day. Andrew Bailey, Governor of the Bank of England and Powell will talk a day later.

For the first time since May 2019, the yield on the U.S. Treasury benchmark 10-year note rose above 2.3%. There was a close-watched gap between two-year Treasury note rates. This indicates an economic downturn.

According to experts, sharp (OTC) movements in the U.S. Treasury Market are increasingly pointing towards a potential recession. Markets doubt the Fed’s plans to create a soft landing for the economy by increasing interest rates to combat inflation.

However, the Ukraine conflict that has been going on since Russia’s invasion on Feb. 24 buffered the yellow metal’s fall. Ukraine declared Monday it wouldn’t comply with Russia’s ultimatum to endanger the city of Mariupol.

Nicholas Frappell from ABC Bullion Global General Manager, stated that “the Ukraine conflict will continue” and would increase supply-chain tensions as well as inflation pressures. He also said that gold support was likely to be affected by the situation.

Palladium fell 0.5%, as it is used in automakers’ catalytic converters that reduce emissions. Platinum was 0.3% higher and silver gained 0.5%

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