Gold prices climbed to their highest level since mid-March on Monday, as the Russia-Ukraine crisis dampened risk appetite and drew investors to the haven of precious metal.
Spot gold was up 0.5% at $1,984.58 per ounce, its highest level since March 14. Gold futures in the United States were up 0.7% at $1,987.70.
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Seems like there is a bit of risk aversion in the market, with some overhang from the Russia-Ukraine situation, said Ilya Spivak, a currency strategist at DailyFX, while cautioning thin liquidity could possibly exaggerate price action.
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On Sunday, Ukrainian soldiers defied a Russian ultimatum to lay down guns in the pulverised port of Mariupol, which Moscow said its forces had almost entirely occupied in what would be the war’s biggest victory, as per Reuters.
During times of political and economic turmoil, bullion is regarded as a secure store of value.
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Gold rose for the second week in a row on Thursday, boosted by safe-haven demand amid the Ukraine conflict and rising inflation. Friday was a holiday, therefore most markets were closed.
On Monday, rates on the benchmark 10-year US Treasury note rose to their highest level since December 2018, halting rises in zero-yield gold.
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While another test of $2,000 is likely the route of least resistance for gold, $2,100 is the bigger, more potent figure to watch, as there are some significant peaks to conquer to make the case for long-term gains, according to Spivak.
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Meanwhile, China’s economy grew faster than predicted in the first quarter, rising 4.8% year on year, according to official statistics released on Monday. However, the likelihood of a significant slowdown in the coming months has increased as broad COVID-19 measures and the Ukraine war take their toll.
Silver was up 0.7% to $25.87 per ounce, platinum was up 1.2% to $1,001.57, and palladium was up 1.6% to $2,406.85 per ounce.