Gold Declined on Wednesday Morning

The price of gold fell on Wednesday morning in Asia, as Treasury yields rose following U.S. and European Sanctions on the Russian Federation offset safe-haven demand.

Gold futures dropped 0.30% to $1,901.65 by 10:38 PM ET (3:38 AM GMT). The U.S. dollar, which typically moves inversely to gold, rose on Wednesday morning. 

On Tuesday, U.S. President Joe Biden took measures that target Russia’s elites as well as the sale of sovereign debt. Biden took measures after Russian President Vladimir Putin ordered troops in the so-called Donetsk People’s Republic and Luhansk People’s Republic.

The sanctions are to punish Russia’s economy without harming energy markets according to a senior U.S. State Department official. In the meantime, Germany also made an important decision. It paused a major gas pipeline project from Russia.

The 750-mile pipeline was completed in 2021 but has not yet received final certification from German regulators. It could deliver 55 billion cubic meters of gas per year. That is more than 50% of the euro zone’s largest economy’s annual consumption. 

The U.S., the U.K, Ukraine and several EU countries opposed the pipeline from the first day. 

Gold and various factors

Importantly, U.S. Treasuries edged higher following the sanctions. 

Investors now expect the central bank to increase interest rates due to higher raw material costs in the wake of tensions over Ukraine.

In the Asia Pacific, the Reserve Bank of New Zealand made an interesting decision. The central bank hiked its interest rates for the third meeting in a row. The country’s central bank also plans a higher-than-expected interest rate to tackle inflation. 

As previously stated, the gold fell on Wednesday morning. Other precious metals were mixed, as silver gained 0.2%, while platinum was flat at $1,075.75 and palladium gained 0.3%.