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Gold jumps over 1% as Ukraine-Russia conflict escalates

Gold jumps over 1% on Thursday, as Russia reports of firing in Ukraine that led investors towards safe-haven assets. While Platinum hits its three month high peak.

Photo: Andrey Rudakov/Bloomberg

Gold Photo: Andrey Rudakov/Bloomberg

Reuters
By Asha Sistla
(Reuters) - Gold jumped more than 1% on Thursday, as Russian news reports of a mortar fire in eastern Ukraine led investors towards safe-haven assets, while dovish signals from U.S. Federal Reserve's minutes of meeting also underpinned bullion.
Spot gold climbed 1.2% to $1,890.95 per ounce as of 0942 GMT, after hitting its highest since June 11 of $1,892.91 earlier. U.S. gold futures also gained 1.2% to $1,893.60.
"Gold benefited from renewed tensions in Eastern Europe. Palladium is likely to move in a similar way, but the moves are driven by supply concerns, while gold benefits from its safe- haven status," UBS analyst Giovanni Staunovo said.
Palladium jumped 2.3% to $2,332.30.
Russia-backed rebels accused Ukrainian forces of shelling their territory in violation of agreements aimed at ending conflict in the contested Donbass area.
The West has threatened Russia- one of the top producers of palladium- with new sanctions if it attacks Ukraine.
"Gold traders need to worry about the details as it is all down to whether Russia attacks or not," said Matt Simpson, senior market analyst, City Index.
If Russia invades, then gold is likely to gain, but to see a sharp reversal that sends gold markedly lower would likely require Russian troops to actually be seen leaving the border, Simpson added.
Minutes of the latest policy meeting on Wednesday signalling a less hawkish-than-feared Fed also supported gold.
"Yesterday's release of the latest FOMC minutes revealed a sentiment amongst the Fed's monetary policy officials that was less hawkish than some had expected, leading to moderate dollar losses, which benefited gold...," ActivTrades senior analyst Ricardo Evangelista said.
Higher interest rates tend to increase the opportunity cost of holding non-interest-paying gold. [US/]
Caught in gold's slipstream, spot silver rose 1% to $23.78 per ounce, platinum jumped 1.7% to $1,079.28 to hit a three-month high.
 
(Reporting by Asha Sistla in Bengaluru, additional reporting by Swati Verma; Editing by Rashmi Aich)

(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: Feb 17 2022 | 5:49 PM IST

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