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Gold Reaches A One-Month High Due to Growing Prices And the Ukraine Crisis

Aria Thomas

Apr 19, 2022 09:29

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By 2:09 p.m. ET (1809 GMT), spot gold had risen 0.1 percent to $1,976.56 per ounce from its previous high of $1,998.10 on March 11. Gold futures in the United States closed 0.6 percent higher at $1,986.4 an ounce.


Gold's ascent was hampered late in the day by a rise in benchmark 10-year US Treasury rates and continued strength in the dollar, which dampens global demand for gold. [US/] [USD/]


"The little increase in tensions caused by the Russia-Ukraine conflict, along with widespread inflationary pressures, increases demand for gold as a safe haven," said David Meger, director of commodities trading at High Ridge Futures.


Concerns over the economic impact of COVID-led limitations in China aided the metal's performance, Meger added. [GOL/AS]


While fears of increasing inflation bolster gold's safe-haven allure, interest rate rises to contain rising prices might damage demand for the commodity due to the increased opportunity cost of keeping non-yielding bullion.


The Federal Reserve of the United States is projected to intensify policy tightening at its next meeting, with a 50 basis point increase anticipated in May and June.


"Technically, spot gold may encounter no opposition until it surpasses $2,000... Gold's capacity to maintain a price over $2,000, on the other hand, may be tested if real yields begin to rise "According to Han Tan, Exinity's chief market analyst. 


Silver spot increased 0.5 percent to $25.80 per ounce, having previously reached a month-high of $26.21.


Platinum rose 2.2% to $1,011.89, its best level since March 25, while palladium increased 2.2% to $2,419.30.


"The supply interruptions caused by the conflict are the pinnacle of palladium and platinum issues," Meger of High Ridge stated.

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