Gold steady as Ukraine tensions counter Fed rate-hike bets

European markets climb amid global gains; Ocado up 6%

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New York: Gold was steady on Wednesday above the $1,800 psychological level as concerns surrounding Ukraine supported the safe-haven metal, while investors awaited U.S. jobs data that is considered key for the Federal Reserve’s tapering timeline.

Spot gold held its ground at $1,801.25 per ounce, as of 0102 GMT. In the previous session, the bullion touched $1,805.43 as investment demand strengthened, with a weak U.S. dollar and Treasury yields offering further support.

Reflecting investor appetite, holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to the highest level since mid-August on Tuesday.

Ukraine announced plans to boost armed forces as European leaders lined up to back the country in a standoff with Russia.

Philadelphia Fed President Patrick Harker was cautious on Tuesday as he pushed back on a rate hike of half a percentage point in March, saying he would have to be convinced it was needed.

Although gold is considered a hedge against inflation and geopolitical risks, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.

Investors are looking forward to the U.S. non-farm payroll data due later this week.

A measure of U.S. manufacturing activity fell to a 14-month low in January amid an outbreak of COVID-19 cases, supporting the view that economic growth lost steam at the start of the year.

Spot silver was up 0.1% at $22.66 an ounce and platinum rose 0.2% to $1,028.65, while palladium shed 0.1% to $2,360.65.

The pan-European Stoxx 600 added 0.7% by mid-morning, with travel and leisure stocks climbing 1.7% to lead gains as almost all sectors and major bourses nudged into positive territory. Oil and gas stocks slid by 0.4%.

Corporate earnings were a key driver of individual share price action on Wednesday, with reports coming from TeamViewer, Santander, Julius Baer, Glencore, Novartis, and Vodafone, among others.

British online supermarket Ocado climbed 6.7% to lead the Stoxx 600 in early deals after Credit Suisse double upgraded the stock to “outperform” and raised its price target.

Julius Baer slid 5.4% to the bottom of the European blue-chip index after its earnings report.

The gains for European markets came amid gains elsewhere this week. In the U.S. on Tuesday, the major averages rose for a third day as stocks attempted a comeback from their tumultuous January, the S&P 500′s worst month since March 2020.

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