By Brijesh Patel
(Reuters) – Gold prices eased on Wednesday from a three-month peak scaled in the prior session, as U.S. President Joe Biden’s remarks seemed to have calmed investors worried about an explosion in Poland.
Spot gold was down 0.3% at $1,772.95 per ounce, as of 0714 GMT, after hitting its highest since Aug. 15 on Tuesday.
U.S. gold futures were flat at $1,776 per ounce.
“Gold is still largely pinned on the Fed… We can see gold is kind of continuing to creep higher since last week’s spike, but it hasn’t really found tremendous follow-through,” said DailyFX currency strategist Ilya Spivak.
“Needless to say, wild card factors, like some sort of more aggressive and more immediate escalation in Ukraine,” could cause gold to become reactive, Spivak said.
The United States and its NATO allies are investigating the blast that killed two in Poland, but early information suggests it may not have been caused by a missile fired from Russia, U.S. President Joe Biden said. Russia denied it was responsible.
Biden’s comments lifted sentiment in the wider financial markets, with MSCI’s broadest index of Asia-Pacific shares outside Japan rising more than 2%. [MKTS/GLOB]
Meanwhile, data on Tuesday showed U.S. producer prices increased less than expected in October, further evidence that inflation was starting to subside.
The data, following last week’s smaller-than-expected increase in October consumer prices, has lifted hopes that the U.S. Federal Reserve could slow its pace of interest rate hikes going forward, putting a floor under gold prices.
While gold is used as a safe investment during times of political and financial uncertainty, rising interest rates tend to dull bullion’s appeal as the metal pays no interest.
Among other precious metals, spot silver rose 0.2% to $21.58 per ounce. Platinum fell 0.5% to $1,009.62 and palladium slipped 0.8% to $2,081.50.
(Reporting by Brijesh Patel in Bengaluru; Editing by Sherry Jacob-Phillips, Janane Venkatraman and Subhranshu Sahu)
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