Gold was down on Wednesday morning in Asia, with the dollar consolidating at its highest level in more than two years and pressuring demand for the greenback-priced yellow metal.
Gold futures were down 0.36% to $1,897.30 by 12:46 AM ET (4:46 AM GMT)
“So, $1,900 is clearly a pivotal level for today’s session… looking further out, it’s not looking ideal at the moment with the U.S. dollar at a 25-month high,” City Index senior market analyst Matt Simpson told Reuters.
The dollar, which normally moves inversely to gold, inched up on Wednesday. It was near its highest level since the COVID-19 pandemic began and set for its best month since 2015.
Meanwhile, Russia halted gas supplies to Poland under the Yamal contract on Wednesday, according to data from the European Union network of gas transmission operators. The latest move highlights the rift between the West and Russia over the war in Ukraine, precipitated by the Russian invasion on Feb. 24.
Headlines from Russia provided some support to gold on Tuesday as investors sought safe havens, but the war in Ukraine has not been as much of a bullish story recently as it was a few weeks ago and is unlikely to last through the week, said Simpson.
Asian shares tracked a global sell-off in global stocks in early trading, as mounting fears about the global economy saw investors retreat from riskier assets in favor of safe havens such as the dollar and government bonds.
In other precious metals, silver inched up 0.1%, platinum inched down 0.1%, and palladium firmed 0.6% to $2,198.48.