Gold prices rose more than 3% on Thursday, with palladium leading the precious metals rally, as Russia’s invasion of Ukraine heightened concerns of the European conflict and drove investors away from riskier assets and towards safe-havens.

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Gold futures rose 3.4% to $1,971.54 per ounce in the global market, the highest level since September 2020. Gold futures in the United States rose 2.4% to $1,956.00. Silver increased by 4.2% to $25.56 per ounce, while platinum increased by 2.7% to $1,121.10.

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Gold prices on the Multi Commodity Exchange (MCX) increased sharply today. Gold futures were trading at Rs 52,536.00 per 10 gm, up 2,157  points or 4.28%. Silver futures were trading at Rs 67,154.00 per kg, up 2,569 points or 3.98%.

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According to HDFC Securities, gold prices in the national capital rose by Rs 1,656 to Rs 51,627 per 10 grams on Thursday as a result of safe-haven buying and a strong devaluation of the rupee due to the Russia-Ukraine conflict. Silver prices rose by Rs 2,350 to Rs 66,267 per kilogram, up from the previous closing of Rs 63,917 per kilogram. As Russia declared a military operation in Ukraine, the rupee fell 109 paise to settle at 75.70 against the dollar.

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“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.

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So far in February, gold has gained more than 9% as the Russia-Ukraine situation has weighed on risk appetite. The metal is on track to have its best month since July 2020. Autocatalyst palladium rose more than 7% to $2,665.99 per ounce, its highest level since August of last year, reported Reuters.

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“A protracted escalation could see gold rising to or above $2,000 per ounce in the short-term, while the PGMs platinum and palladium are supported on metal availability concerns.” UBS analyst Giovanni Staunovo said. 

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Russia is the world’s third-largest producer of gold, while Moscow-based Nornickel is also a major producer of palladium and platinum.