Gold inches higher as Ukraine conflict lifts safe-haven bids

Shafaq News / Gold prices edged higher on Wednesday as concerns of an escalation in the Russia-Ukraine conflict increased safe-haven bids for the precious metal, although a firmer U.S. dollar capped bullion’s gains.

Spot gold was up 0.2% at $1,969.61 per ounce, as of 0400 GMT, after hitting a near one-month peak of $1,978.21 on Tuesday. U.S. gold futures were down 0.1% at $1,973.70.

Russian President Vladimir Putin described the on-and-off peace negotiations as “a dead-end situation” on Tuesday, while U.S. President Joe Biden said for the first time that Moscow’s invasion of Ukraine amounts to genocide.

The dollar index firmed near May 2020 highs, making gold less attractive for overseas buyers, after reassurance from U.S. Federal Reserve Governor Lael Brainard that the central bank will stay the course on hiking interest rates.

Although gold is considered a hedge against inflation and geopolitical risks, interest rate hikes would raise the opportunity cost of holding non-yielding bullion.

“March inflation came in at up 8.5%, year-on-year, which is a 40-year high, inflation historically bullish for hard commodities,” said Michael Langford, director at corporate advisory AirGuide.

Spot gold faces a strong resistance at $1,975 per ounce, according to Reuters technical analyst Wang Tao. [TECH/C]

Spot silver was up 0.5% at $25.48 per ounce, platinum rose 0.7% to $971.96 and palladium gained 2.7% to $2,387.77.

(Reuters)