Tuesday, May 17

Gold climbs to 1-month high as Ukraine crisis drags on


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Gold prices jumped about 1% to a more

than one-month high on Monday as concerns over the economic

fallout from the Russia-Ukraine war and surging inflation drove

investors to the safe-haven asset.

Spot gold was trading at $1,993.28 per ounce as of

0947 GMT, its highest level since March 11. US gold futures

jumped 1.2% to $1,997.70 per ounce.

“Bullion’s upward momentum is set to continue as long as

markets are fed with a steady stream of negative headlines

pertaining to a darkening global outlook,” said Han Tan, chief

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market analyst at Exinity.

The war in Ukraine has so far showed no signs of easing and

has added to soaring inflation and dampened global growth

outlook.

Several big Wall Street banks have raised concerns the US

Federal Reserve’s aggressive policy tightening measures could

bring about a recession as they work their way through the

economy.

China’s economy slowed in March as consumption, real estate

and exports were hit hard, as sweeping COVID-19 curbs and the

Ukraine war took a toll in the world’s top gold consumer.

“From a technical perspective, spot gold may face little

resistance once it goes north of $2,000… However, gold’s

ability to keep its head above $2000 may be strained once real

yields break into positive territory,” Tan added.

Bullion is considered a safe store of value during times of

political and economic crisis.

Restraining advances in zero-yield gold on Monday, yields on

the benchmark 10-year US Treasury note jumped to

their highest since December 2018, while the dollar stood strong

near recent highs.

Among other metals, spot silver rose 0.9% to $25.91

per ounce and hit an over one-month high. Platinum jumped

1.5% to $1,004.36 and palladium climbed 1.1% to

$2,394.68.

(Reporting by Eileen Soreng in Bengaluru, additional reporting

by Swati Verma; Editing by Amy Caren Daniel)



financialpost.com