Top representatives of the US and Russia are scheduled to meet to discuss ending the war in Ukraine. Despite the prospects of a Russia-Ukraine peace deal, a sense of caution prevails as any decision could be taken without the presence of Ukrainian and European leaders.
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According to Reuters, “French President Emmanuel Macron hosted an emergency summit on Ukraine on Monday after US officials suggested that Europe would have no role in any talks aimed at ending the conflict in Saudi Arabia this week.”
Lower risk sentiment has put a fresh bid on the safe-haven US dollar (USD) below, curbing the rally in gold price. Additionally, US Federal Reserve (Fed) policymakers have called for prudent sentiment on the outlook for inflation and interest rate cuts, helping lift the USD along with US Treasury bond yields.
Fed Governor Michelle Bowman said on Monday that rising asset prices may have hampered the Fed’s recent progress on inflation. Fed Governor Christopher Waller said: Inflation progress remained too slow last year. A cut in 2025 would be appropriate if inflation repeats the 2024 pattern.” Meanwhile, Philadelphia Fed President Patrick Harker said the current economy advocates a steady policy for now. Looking ahead, speeches by Fed officials Mary Daly and Michael Barr will be closely scrutinized for fresh cues on the policy outlook as focus turns to the minutes of the Fed’s January meeting.
However, developments surrounding the talks between the Kremlin and Washington will emerge as the primary market driver, as US traders return to their desks after a long weekend. In the event of an outcome, risk aversion could increase and gold prices could see renewed demand and move higher in sync with the greenback.
