Gold prices jumped about 1% to a more than one-month high on Monday as concerns over the economic fallout from the Russia-Ukraine war and surging inflation drove investors to the safe-haven asset.
Spot gold was trading at US$1,993.28 per ounce as of 0947 GMT, its highest level since March 11. U.S. gold futures jumped 1.2% to US$1,997.70 per ounce.
“Bullion’s upward momentum is set to continue as long as markets are fed with a steady stream of negative headlines pertaining to a darkening global outlook,” said Han Tan, chief market analyst at Exinity.
The war in Ukraine has so far showed no signs of easing and has added to soaring inflation and dampened global growth outlook.
Several big Wall Street banks have raised concerns the U.S. Federal Reserve’s aggressive policy tightening measures could bring about a recession as they work their way through the economy.
China’s economy slowed in March as consumption, real estate and exports were hit hard, as sweeping COVID-19 curbs and the Ukraine war took a toll in the world’s top gold consumer.
“From a technical perspective, spot gold may face little resistance once it goes north of US$2,000… However, gold’s ability to keep its head above US$2000 may be strained once real yields break into positive territory,” Tan added.
Bullion is considered a safe store of value during times of political and economic crisis.
Restraining advances in zero-yield gold on Monday, yields on the benchmark 10-year U.S. Treasury note jumped to their highest since December 2018, while the dollar stood strong near recent highs.
Among other metals, spot silver rose 0.9% to US$25.91 per ounce and hit an over one-month high. Platinum jumped 1.5% to US$1,004.36 and palladium climbed 1.1% to US$2,394.68