Gold has drifted lower to now be trading only a little above $1,900 an ounce, some way off the all-time record it was flirting with last week.
While the war in Ukraine is far from being over, with the prospect of a multi-month or even year conflict still very real, the fact both sides have been engaged in peace talks provides ground for hope.
Hope of peace is of course essential for the people of Ukraine and indeed the world but gold has slipped slightly out of favour as the acute fear at the start of Russia’s invasion and the subsequent rush to haven assets, such as gold, has receded.
Gold has come under further pressure ahead of the Federal Reserve’s monthly interest rate meeting later today, where it seems almost guaranteed that the US central bank will announce its first hike since 2018.
The measure, which is driven by a desire to try and control runaway inflation, is a reminder of the more hawkish outlook that prevailed at the start of the year, during which gold struggled to make noticeable gains.

Russia’s invasion of Ukraine has further exacerbated the inflationary environment given the two countries’ importance in the production of a host of metals, grains and other natural resources.
The Fed’s near-certain rate rise makes gold less attractive with its lack of yield as well as strengthening the dollar, with which gold has an inversely correlated relationship.
For now, the short-term outlook for gold looks negative and it will be interesting to see whether the precious metal can hold above $1,900 an ounce to get a sense of how much underlying support remains for gold.
Given that there is a war ongoing in Europe that could quickly escalate into a much broader conflict, gold’s medium-term outlook still looks positive with fresh gains up to $2,000 an ounce impossible to rule out.
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Rupert is a Market Analyst for Kinesis Money, responsible for updating the community with insights and analysis on the gold and silver markets. He brings with him a breadth of experience in writing about energy and commodities having worked as an oil markets reporter and then precious metals reporter during the seven years he worked at Bloomberg News.
As well as market analysis, Rupert writes longer-form thought leadership pieces on topics ranging from carbon markets, the growth of renewable energy and the challenges of avoiding greenwash while investing sustainably.