XPT/USD drops towards $1,100 as fears over Ukraine recede
- Platinum extends the previous day’s pullback from the nine-month high.
- Market sentiment improves as EU and UK back out of total ban on Russian oil imports, Ukraine’s human corridor remains in limbo.
- Commodities are consolidating their strong gains but remain in the spotlight amid fears of tighter supply.
- US CPI will be a big deal, risk catalysts will keep the driver’s seat.
Platinum (XPT/USD) trails other commodities south early Tuesday as it falls 0.40% intraday to $1,122 at press time. In doing so, the precious metal extends the previous day U-turn from the highest levels since June 2021 as risk appetite improves.
The rejection by the European Union (EU) and the United Kingdom of the US plan to ban Russian oil imports appears to have triggered the latest market consolidation. On the same line could be headlines from Reuters suggesting hopes for human corridor talks in Ukraine to evacuate civilians.
“Moscow would give residents of the Ukrainian cities of Sumy and Mariupol the choice of moving elsewhere in Ukraine on Tuesday, setting an early-hours deadline for Kiev to accept, Russian news agencies reported,” Reuters said. World Bank (WB) humanitarian aid to Kyiv could also boost risk appetite.
On the contrary, the lack of major progress in the Russian-Ukrainian talks and Moscow’s continued invasion of Kiev are weighing on market sentiment. According to Reuters, “Ukrainian officials said a Russian airstrike hit a bread factory in northern Ukraine on Monday, killing at least 13 civilians, while talks between Kyiv and Moscow made little progress towards the appeasement of the conflict”.
Amid those games, 10-year US Treasury yields extend the two-month prior’s rebound to 1.8%, up five basis points at the latest, while S&P 500 futures are posting higher. slight gains at the latest.
Going forward, headlines from Russia and Ukraine will be the main catalyst for market participants to watch near-term direction, while Thursday’s U.S. Consumer Price Index (CPI) could offer additional directions.
Despite the latest pullback from $1,159, XPT/USD remains above the 50% Fibonacci retracement of the Feb-Dec 2021 decline around $1,115, placing a short-term floor below prices.