Gold prices jump over 2% as Russian troops attack Ukraine

By Asha Sistla

(Reuters) - Gold prices on Thursday jumped over 2% to their highest in more than a year, with investors flocking to safe havens as Russian forces invaded Ukraine after President Vladimir Putin authorised what he called a special military operation.

 

Spot gold XAU= climbed 1.7% to $1,939.97 per ounce by 0611 GMT, after hitting its best level since January 2021 at $1,948.77. U.S. gold futures GCv1 rose 1.8% to $1,943.90.

 

Russian forces fired missiles at several Ukrainian cities and landed troops on its south coast, officials and media said. (Full Story)

 

Gold, considered a safe store of value during uncertain times, has risen about 8% in February so far as the Russia-Ukraine crisis walloped risk appetite. The metal is headed for its best monthly performance since July 2020.

 

"Gold is a haven asset along with the U.S. dollar and this is its day. We could inevitably see new all time highs in gold," said Jeffrey Halley, a senior market analyst at OANDA.

 

Prices could continue rallying towards resistance at $1,960 an ounce and test $2,000 in the next few sessions, Halley added.

 

Russia is the world's third-largest producer of gold, while the country's Nornickel GMKN.MM is also a major producer of palladium and platinum.

 

Spot silver gained 2.1% to $25.03 per ounce, platinum XPT= rose 1% to $1,102.43, and palladium XPD= added 1.3% to 2,514.54.

 

The dollar and oil prices also rocketed higher, while global stocks and U.S. bond yields dived. MKTS/GLOB O/R

 

Stephen Innes, managing partner at SPI Asset Management, said "it's just not the fog of war for gold, but also inflation", especially with oil hitting $100 a barrel, and that's why gold is becoming a defensive product.

 

"There is a shift into gold for hedging relatively cheap, believe it or not, at this price," Innes added.

 

(Reporting by Asha Sistla and Bharat Govind Gautam in Bengaluru; Editing by Devika Syamnath)