Business Standard

Gold hits over one-week high on Ukraine crisis, soaring inflation

Silver climbed 2.3% to $25.65 per ounce, platinum inched up 0.1% to $1,021.38, and palladium was steady at $2,512.03

Photo: Andrey Rudakov/Bloomberg

Photo: Andrey Rudakov/Bloomberg

By Brijesh Patel
(Reuters) - Gold prices rose to a more than one-week high on Thursday as its safe-haven appeal was lifted by concerns over soaring inflation and uncertainty surrounding the war in Ukraine.
Spot gold was up 0.8% at $1,958.75 per ounce by 10:23 a.m. ET (1423 GMT, its highest since March 14. U.S. gold futures rose 0.9% to $1,954.80.
"The very strong underlying inflationary pressures continue to be the main supportive fundamental factor driving the gold price. There are other ancillary factors, most notably, the war in Ukraine," said David Meger, director of metals trading at High Ridge Futures.
Last week, the Federal Reserve raised borrowing costs by 25 basis points, and since then top Fed policymakers have batted for a more aggressive approach to monetary policy tightening this year to fight rising inflation.
"Even the idea of a rising interest rate environment nipping at the heels of the gold market is not enough to offset the positive pressures that we're seeing from the inflationary tilt. We believe that the Fed remains behind the curve," Meger added.
Gold, which pays no interest, tends to lose its appeal when interest rates rise, but the rising conflict in Ukraine and a spike in oil prices adding to existing inflationary pressures have put a floor under gold prices, analysts said.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to its highest since February 2021 on Wednesday. [GOL/ETF]
With bullion-backed ETF's elevated, "gold could well attract more suitors if stagflation risks become more amplified over the near term," said Han Tan, chief market analyst at Exinity.
Meanwhile, U.S. President Joe Biden will meet European allies at a special NATO summit on Thursday amid a dispute over whether to impose further energy sanctions on Russia.
Silver climbed 2.3% to $25.65 per ounce, platinum inched up 0.1% to $1,021.38, and palladium was steady at $2,512.03.
(Reporting by Brijesh Patel in Bengaluru; Editing by Amy Caren Daniel)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Mar 24 2022 | 8:31 PM IST

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