Gold gains on concerns over Ukraine crisis, inflation

Gold rose on Wednesday as unruly inflation and the intensifying Ukraine crisis fed demand for the safe-haven metal, although a firmer dollar and high bonds yields put a lid on gains

Spot gold was up 0.4% at $1,929.70 per ounce by 10:20 a.m. ET. U.S. gold futures added 0.6% to $1,933.50

“You’re seeing a little bit of safe-haven demand and a little perceived bargain hunting at lower price levels in the gold market,” said Jim Wyckoff, senior analyst at Kitco Metals

The yellow metal had scaled record highs earlier in March but retreated sharply from those levels in the run-up to last week’s Federal Reserve meeting

Prices have since moved into a more steady range as the market digested a more hawkish outlook from Fed policymakers

High inflation is in favor of precious metals and it is “not going to go away anytime soon,” Wyckoff said. He added that rising bond yields were limiting the gains in gold and could force the metal to trade “sideways and choppy

Yields on the benchmark U.S. 10-year Treasury have hit their highest in nearly three years, increasing the opportunity cost of holding zero-yield bullion

The dollar was also higher on the day, making gold expensive for holders of other currencies

Holdings of the world’s largest gold-backed ETF, SPDR Gold Trust, hit their highest since March 2021 this week

“What’s phenomenal at the moment and a good indicator of a beginning of a gold bull market is ETF (exchange traded fund) demand remains remarkably strong,” independent analyst Ross Norman said

Spot silver rose 0.6% to $24.91 per ounce, while platinum fell 0.4% to $1,019.31 and palladium was down 0.1% at $2,482.70