Gold surges as investors seek steady ground following Russian invasion of Ukraine
Gold and palladium prices surged this morning as investors looked for steady ground in a morning which saw global equity markets plunge after Russia invaded Ukraine.
Gold climbed 3.4 per cent to $1,971.54 per ounce by 11:40 GMT, the highest since September 2020. U.S. gold futures jumped 2.4% to $1,956.00.
“Investors are diverting investments from riskier assets, such as stocks, to traditional safe heavens, increasing demand for the precious metal and supporting its price,” said Ricardo Evangelista, Senior Analyst, ActivTrades.
Evaneglista said there is a dynamic that creates scope for further gold price gains as the conflict and economic retaliation from the West, and counter-retaliation from Moscow, unfolds and keep high levels of uncertainty in the financial markets.
Gold has risen over 9% in February so far as the Russia-Ukraine crisis hammered risk appetite. The metal is headed for its best monthly performance since July 2020.
“There is obviously safe-haven demand coming into the (gold)price, but this crisis is very inflationary because it’s adding upward pressure on commodities prices … it is recessionary as well in terms of the growth perspective,” Saxo Bank analyst Ole Hansen said.
Palladium meanwhile jumped over 7 per cent to $2,665.99 an ounce at times this morning, its highest since August last year.