Significant gains for gold on Thursday, with the price of the precious metal exceeding the limit of $ 1,900 and closing at the highest level since June 2021, finding impetus from the climate of intense uncertainty caused by the Russian-Ukrainian crisis and possible Russian invasion of the neighboring country.
US President Joe Biden today reiterated his warning that the threat of Russian invasion of Ukraine is “very high”, saying he “expects it to happen in the coming days”. Asked how high the threat of a Russian invasion is at the moment, Biden replied “it is very high”, adding that “I have a feeling it will happen in the coming days”.
Shortly before Biden’s statements, a senior State Department official said the United States had received Russia’s response to the security proposals sent by the USA.
For his part, US Secretary of State Anthony Blinken warned from the UN Security Council that the Russian armed forces were preparing intensively for an attack on Ukraine “within days”, adding that Russia plans to create a pretext for an attack on its neighboring country that would involve an alleged or actual chemical weapons attack.
Russia formally informed the United States on Thursday that it would be forced to respond, using even “military technical means”if Washington does not negotiate legally binding security guarantees for Moscow, as reported by Reuters.
“If Russia invades Ukraine, it will face sanctions that will almost exclude it from the global financial system,” said Kyle Roda, an IG analyst. “Many investors will look for value stores and the Russian Central Bank may be forced to sell dollars and increase its gold reserves.”
“Gold is gaining momentum from a resurgence of tensions in Eastern Europe. Palladium is likely to follow suit, although its movement is driven by supply concerns, while gold benefits from its ‘safe haven’ character.” , said UBS analyst Giovanni Staunovo.
The situation for gold is “a mixture of Cold War and ‘hot’ inflation, because beyond geopolitical issues there are strong economic data that have driven gold to higher levels since late January,” Brien Lundin observed.
The US Federal Reserve is now less than four weeks away from its first expected rate hike since 2018, and “these first increases usually signal a gold rally,” Lundin said. “I expect this now, even if gold corrects a little when the geopolitical tension subsides, its price will probably remain higher than before.”
In this climate, the gold April delivery rose $ 30.50, or 1.6 percent, to $ 1,902 an ounce, a nearly eight-month high from June 2, according to FactSet.
The silver March delivery added 27 cents, or 1.1%, to close at $ 23,875 an ounce, its highest level since Jan. 25.
As for the other metals, o copper March delivery fell 0.3% to $ 4,523 a pound, h platinum April delivery gained 2.7% to $ 1,092.70 an ounce palladium March delivery closed at $ 2,359.10 an ounce, up about 3.9%.
Source: Capital
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