Gold climbed to a one-month high on Monday, April 18, just shy of the $2,000 an ounce, as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven bids for the precious metal.
Spot gold rose 0.1% to $1,976.56 per ounce by 2:09 p.m. ET (1809 GMT), after earlier hitting its highest since March 11 at $1,998.10. U.S. gold futures settled 0.6% higher at $1,986.4.
Gold’s advance was curbed late in the session by a jump in benchmark 10-year U.S. Treasury yields and further gains in the dollar, which dulls the appetite for gold among overseas buyers.
“The little step-up in tension due to the Russia-Ukraine war with inflationary pressures across the board boost safe-haven demand for gold,” said David Meger, director of metals trading at High Ridge Futures.
Concerns over the economic hit from COVID-led restrictions in China also supported the metal, Meger said.
Although concerns of soaring inflation boost gold’s safe-haven appeal, interest rate hikes to temper higher prices could hurt demand for the metal because of the higher opportunity cost of holding non-yielding bullion.
The U.S. Federal Reserve is expected to accelerate its pace of policy tightening when it meets next, with a rise of 50 basis points expected in the May and June meetings.
“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 $2,000 may be strained once real yields break into positive territory,” Han Tan, chief market analyst at Exinity, said.
Spot silver rose 0.5% to $25.80 per ounce, having earlier hit its highest in over a month at $26.21.
Platinum gained 2.2% to $1,011.89, its highest since March 25, while palladium was up 2.2% to $2,419.30.
“The epitome of concerns for palladium and platinum is about supply disruptions due to the war,” High Ridge’s Meger said.
Reporting by Seher Dareen, Ashitha Shivprasad and Eileen Soreng in Bengaluru; Editing by Devika Syamnath, Barbara Lewis and Krishna Chandra Eluri