Gold prices rose in European trade on haven demand amid mounting geopolitical tensions, with Russian president Vladimir Putin announcing a new military effort to control Ukraine.
Prices were also boosted by a spike in US 10-year treasury yields ahead of the Federal Reserve's policy decisions later today, expected to hike rates by 75 basis points to 3.25%.
Prices Today
Gold prices rose 0.7% to $1,676 an ounce, after losing 0.7% on Tuesday, as US treasury yields spike to fresh highs while demand swooned back then on gold futures.
Russian Military Mobilisation
Russian President Vladimir Putin announced a partial military mobilisation in the country , putting the economy in a constant war state amid the ongoing Ukrainian campaign.
Putin accused the west of waging war on Russia and asserted Russia will use every available tool to protest itself and its people against external threats.
The mobilisation means gathering upwards of 300 thousand reserve troops to serve in the military campaign in Ukraine.
US Yields
US 10-year treasury yields fell 1.4% on Wednesday off 11-year highs at 3.604%, on track for the first loss in three sessions.
The decline came after the Russian escalation and mobilisation as it rattled the market for a bit.
The Federal Reserve
Later today, the Federal Reserve will announce its policy decisions, expected fully to hike rates by 75 basis points to 3.25%, the third such increase in a row.
And there's a 19% chance the Fed might actually raise rates by 100 basis points, heading for 4.5% by March 2023.
Estimates
Analysts now expect gold prices to hover around $1,680 in the short term, and if the Fed took aggressive action today, prices might plummet to near $1,600.
The SPDR
Gold holdings at the SPDR Gold Trust fell 4.63 tones yesterday to a total of 953.32 tones, the lowest since March 2020.