Gold hits 1-month high on rising inflation, Ukraine crisis

Gold rose more than 1% to a one-month high on Monday as concerns around the Russia-Ukraine conflict and rising inflationary pressures increased safe-haven bids for the precious metal

Spot gold rose 0.9% to $1,993.07 per ounce by 10:01 a.m. ET, after earlier hitting its highest since March 11. U.S. gold futures gained 1% to $1,994.70

“The little step-up in tension due the Russia-Ukraine war with inflationary pressures across the board boosts safe-haven demand for gold,” said David Meger, director of metals trading at High Ridge Futures

Gold’s advance came despite a jump in benchmark 10-year U.S. Treasury yields to the highest since December 2018, and a strong dollar, which usually dulls appetite for gold among overseas buyers

Concerns over the economic hit from Covid-led restrictions in China also supported the metal’s prices, Meger said.

Although concerns of soaring inflation boost gold’s safe-haven appeal, interest rate hikes to temper higher prices could hurt demand for the metal due to the higher opportunity cost of holding non-yielding bullion

U.S. Federal Reserve policymakers are expected to accelerate their pace of policy tightening when they next meet in May

“From a technical perspective, spot gold may face little resistance once it goes north of $2,000… However, gold’s ability to keep its head above $2000 may be strained once real yields break into positive territory,” Han Tan, chief market analyst at Exinity

Among other metals, spot silver rose 1.5% to $26.07 per ounce, having earlier hit its highest in more than a month at $26.21

Platinum gained 2.7% to $1,016.72, its highest since March 25, while palladium was up 2.1% to $2,417.65

“The epitome of concerns for palladium and platinum is about supply disruptions due to the war,” High Ridge’s Meger said