Gold Rises on Ukraine Concerns

Spot gold increase 0.1% to $1,945.92 per ounce by 1229 GMT. U.S. gold futures rose 0.8% to $1,953.50.

According to Han Tan, chief market analyst Exinity, gold’s upside is severely capped by the Fed’s aggressive bias towards rate hikes. However, the precious metal stays well-supported by persistent worries over the Russia-Ukraine war’s global implications.

Gold is susceptible to rising interest rates, which boosts the opportunity cost of holding it.

Last week, the U.S central bank increased borrowing costs by 25 basis points, disappointing market sections that had priced in a more significant move.

Top Fed policymakers have since batted for a more aggressive strategy to monetary policy tightening this year to bring down soaring inflation.

That has supported up the dollar and limited gains in dollar-priced gold, while yields on the U.S. 10-year Treasury note reduced but stayed close to their 2019 highs. [USD/][US/]

With bullion-backed exchange-traded funds advanced, gold could draw more suitors who hold to the precious metal as a haven and an inflation-hedge, particularly if stagflation risks become more amplified over the near term, Tan stated. [GOL/ETF]

Putin to Lose Access to Gold Reserves

Meanwhile, Britain and its Western partners will examine whether more can be done to prevent President Vladimir Putin from accessing Russia’s gold reserves, Prime Minister Boris Johnson stated.

Russian central bank reserves are likely not actively traded.

Nevertheless, in theory, a move would withdraw some gold from the market, likely decreasing liquidity and potentially helping gold prices, Dahdah spoke.

Spot silver increased 0.4% to $25.17 per ounce, platinum inched up 0.2% to $1,021.99, and palladium gained 0.5% to $2,524.78.