Gold steadies near $2,000 as Ukraine worries boost appeal

Published On: March 11, 2022Categories: Alternative Investments1.3 min read

Spot gold advanced 0.2% to $1,996.30 and U.S. gold futures settled up 0.6% at $2,000.40

Gold steadied near the $2,000 an ounce level on Thursday, after big gyrations over the past couple of sessions, as its safe-haven appeal was supported by a lack of progress in talks between Russia and Ukraine.

Spot gold advanced 0.2% to $1,996.30 per ounce by 1853 GMT, after tumbling as much as 3% on Wednesday. U.S. gold futures settled up 0.6% at $2,000.40.

A rush to safe-haven assets earlier this week had pushed gold near the record levels hit in August 2020.

Investors also took stock of February inflation data from the United States, which was in line with expectations but also showed the biggest year-on-year increase since January 1982.

The inflation numbers are certainly an underlying bullish element for gold. However, geopolitics is trumping economic data right now, said Jim Wycoff, senior analyst at Kitco Metals.

Gold bulls spent a lot of energy pushing prices to a record high earlier this week. Now, even bullish inflation data isn’t given much benefit because prices are just exhausted, he said.

Against the backdrop of surging oil and commodity prices, investors now await the Federal Reserve’s next policy statement on March 16.

Hurting appetite for riskier assets, talks between Russia and Ukraine’s foreign ministers made no apparent progress towards a ceasefire.

Palladium, used by automakers in catalytic converters to curb emissions, rose 0.4% to $2,948.73 per ounce. The metal hit a record high of $3,440.76 on Monday on fears of supply disruptions from top producer Russia.

Overall, gold and palladium are still ‘relatively strong’, with technicals pointed to the upside, said Eli Tesfaye, senior market strategist at RJO Futures, adding that Thursday’s price action is likely to set the tone going forward.

About the Author: Jonathan Adams

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