Volatility Could Drag Gold Back

Gold prices are volatile on Tuesday as risk sentiment ebbs and flows surrounding the Ukraine crisis. The precious metal trades now at $2,052.70 per ounce.

At $2,041 per ounce, gold prices are higher by 2.20% on the day despite a $50 per ounce drop in midday New York on the back of a spike in risk appetite.

The Gold Index XAU/USD gave back the majority of the session’s gains following headlines that swept through Twitter feeds, rehashing old news pertaining to Ukraine’s tone of compromise with Russia.

Overall, however, market risk sentiment remains low as the US has said it will ban imports of oil and gas from Russia. Nevertheless, an interview between Ukraine’s president Volodymyr Zelenskyy and ABC News from Monday night was published by The Associated Press that emphasises “Ukraine is no longer pressing for NATO membership”.

Zelensky said he is open to “compromise” on the status of two breakaway pro-Russian territories that President Vladimir Putin recognized as independent just before unleashing the invasion on February 24.

On the knee-jerk, US oil fell around $8.50/bbls and the gold price has also been sold-off by some 2.4% or around $50.00 per ounce. DXY, a measure of the US dollar vs a basket of currencies fell hard as well by around 48 pips while the euro rallied to session highs of 1.0953.