By Gina Lee
Investing.com – Gold was down on Monday morning in Asia, as the U.S. Federal Reserve's hawkish stance on monetary policy capped gains. However, safe-haven support came as fighting in Ukraine shows no sign of abating.
Gold futures were up 0.66% to $1,671.75 by 12:56 PM ET (4:56 AM GMT).
"A little bit of safe-haven flows (are) going into gold today because Ukraine officially rejected the deadline from Russia," City Index senior market analyst Matt Simpson told Reuters.
Ukraine on Monday rejected Russian calls to surrender the city of Mariupol, and there seems to be no end in sight to a conflict that began with Russia’s invasion on Feb. 24.
Two Fed policymakers said on Friday the central bank needs to take more aggressive steps to combat inflation, which prevented further gains for the yellow metal. Minneapolis Fed President Neel Kashkari said he wants to raise rates to 1.75% to 2% in 2022.
Fed Chairman Jerome Powell and Atlanta Fed President Raphael Bostic will both speak later in the day. European Central Bank President Christine Lagarde will speak at the BIS Innovation Summit 2022 on Tuesday, with Powell and Bank of England Governor Andrew Bailey to follow a day later.
Holdings of SPDR Gold Trust (P:GLD) rose 0.8% to 1,082.44 tons on Friday, the highest since March 2021.
In other precious metals, palladium jumped 2.8% to $2,561.25 per ounce. It hit a record high of $3,440.76 on Mar. 7, over fears of supply disruptions in Russia, a top producer.
The auto-catalyst metal is responding better to the conflict in Ukraine, "because with Ukraine officially saying no to Russia, it puts peace talks on the back foot and of course that brings further concerns over supplying constraints moving forward," said Simpson.
Silver gained 0.4% and platinum rose 0.8%.