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ahmed muzhir
Mar 24, 2022 11:55AM ET
gold is all ready high
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Gold scales more than one-week peak on Ukraine, inflation worries
Published Mar 24, 2022 04:06AM ET
Updated Mar 24, 2022 03:12PM ET
© Reuters. FILE PHOTO: Marked ingots of 99.99 percent pure gold are placed in a cart at the Krastsvetmet non-ferrous metals plant in the Siberian city of Krasnoyarsk, Russia March 10, 2022. REUTERS/Alexander Manzyuk/
By Brijesh Patel
(Reuters) - Gold rose to a more than one-week high on Thursday as concerns over soaring prices and uncertainty surrounding the war in Ukraine lifted bullion's appeal as a safe-haven and an inflation hedge.
Spot gold was up 1% at $1,963.21 per ounce at 1:48 p.m. EDT (1748 GMT), its highest level since March 14. U.S. gold futures settled up 1.3% at $1,962.20.
"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.
The Federal Reserve raised borrowing costs by 25 basis points on March 16, and since then top U.S. central bank policymakers have signalled 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 ongoing 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 (P:GLD), the world's largest gold-backed exchange-traded fund, rose to its highest level since February 2021 on Wednesday.
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, Western leaders meeting in Brussels agreed to strengthen their forces in Eastern Europe, increase military aid to Ukraine and tighten their sanctions on Russia as Moscow's assault on its neighbour entered a second month.
Silver climbed 2% to $25.55 per ounce, platinum gained 0.4% to $1,024.50, and palladium rose 0.6% to $2,525.72.
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Comments (2)
Massine Fariss
Mar 24, 2022 7:34AM ET
1970 /1977 rising rates with rising gold prices … even a 4% interest rate wont bring inflation down . Keep buying gold
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