Gold prices hit a 13-month high on Indian commodity exchange MCX on Tuesday as tensions between Russia and the West escalate over Ukraine, prompting investors to steer clear of assets more risky and opt for safe haven bullion. The Gold April futures contract rose almost 1.5% to over 50,000 rupees per 10 grams.
On the other hand, COMEX gold prices climbed to an eight-month high. COMEX spot gold rose 0.3% to $1,876.71 an ounce at 0350 GMT, after hitting its highest level since June 11 at $1,878.88 earlier in the day. US gold futures rose 0.5% to $1,879.00.
Due to the Ukraine crisis, gold is supported by the inflation channel due to rising crude oil prices and by the risk aversion channel due to falling inventories, Stephen said. Innes, managing partner of SPI Asset Management, quoted by Reuters.
“If we lose that momentum from Ukraine, then gold breaks off pretty quickly,” Innes said. Asian stocks fell as investors considered the implications of a potential impending Russian invasion of Ukraine.
“The (gold) market seems to be ignoring the major central banks at the moment because investors are lost in the fog of war and it becomes very difficult to have a salient macro or fundamental view in this type of market where you really have to trade on a hair trigger,” Innes said.
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Bullion is generally seen as a hedge against geopolitical strife, and with tensions simmering around Ukraine, spot gold has risen around 5% since Jan. 31, forecast for a 10th round of gains in 12.
Supporting bullion on Tuesday, benchmark 10-year U.S. Treasury yields declined, reducing the opportunity cost of holding non-interest-paying gold, while a slightly weaker dollar helped make the metal more attractive to foreign buyers.
U.S. Federal Reserve officials continued to argue over how aggressively to begin interest rate hikes at their March meeting, with a final inflation reading just before the two-day session taking a hit. potentially disproportionate importance.
Among other precious metals, spot silver gained 0.3% to $23.91 an ounce and platinum added 0.1% to $1,029.19, while palladium fell 0. 3% to $2,353.18.
– With the contributions of the agency
(Edited by : Bivekananda Biswas)
First post: STI