Russia-Ukraine conflict: Gold hits 19-month high

Gold was trading at $2,004 an ounce, up 1.97 per cent Monday, an increase of 9.65 per cent year to date, according to FactSet



The yellow metal was last seen trading just above the $1,980 level, still up over 1.0 per cent for the day. — File photo
The yellow metal was last seen trading just above the $1,980 level, still up over 1.0 per cent for the day. — File photo
by

Issac John

Published: Mon 7 Mar 2022, 6:23 PM

Last updated: Mon 7 Mar 2022, 7:03 PM

Gold prices surged to a 19-month high to cross $2,000 an ounce on Monday as investors flocked to safe havens amid the escalating Russia-Ukraine war.

Gold was trading at $2,004 an ounce, up 1.97 per cent Monday, an increase of 9.65 per cent year to date, according to FactSet. Last week, spot gold increased by 4.30 per cent to $1970 levels.

The yellow metal was last seen trading just above the $1,980 level, still up over 1.0 per cent for the day.

“The worsening situation in Ukraine continued weighing on investors’ sentiment, which was evident from an extension of the recent sell-off in the global equity markets. The latest developments provided a goodish lift to the safe-haven gold, though bulls struggled to push spot prices beyond the $2,000 psychological mark, analysts at FXStreet said.

Gold is a safe-haven commodity that is due for a much bigger rally going forward, according to Goldman Sachs. “The recent escalation with Russia create clear stagflationary risks to the broader economy, driven by higher energy prices, which reinforce our conviction in higher gold prices in coming months and our $2,150/ ounce price target,” Goldman said.

Given the recent strong bullish run, slightly overbought conditions on short-term charts prompted traders to take some profit off their bullish positioning around gold. Apart from this, a blowout dollar rally was seen as another factor that acted as a headwind for the dollar-denominated commodity, precious metal analysts said.

The downside remains cushioned amid worries about the potential economic fallout from a further escalation of the Russia-Ukraine war. The fundamental backdrop remains tilted firmly in favour of bullish traders and supports prospects for further gains. Hence, any meaningful pullback might still be seen as a buying opportunity and is more likely to remain limited amid absent relevant market-moving economic releases, analysts said.

— issacjohn@khaleejtimes.com


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