Gold rose to a five-week high as the war in Europe, elevated inflation, and the risk of a US recession boosted demand for the haven asset.
The precious metal climbed as much as 0.8 per cent after capping a second weekly gain. Spot gold rose 0.8 per cent to $1,993.33 an ounce as of 10.42 am in London, after touching the highest intraday level since March 11 earlier.
The possibility of a EU embargo on Russian gas and the threat of some curbs on crude in Europe’s next sanctions package bolstered both commodities. That’s adding to already elevated raw material prices, fueling demand for gold as a hedge against accelerating inflation. Bullion’s advance comes even as 10-year Treasury yields surge toward 3 per cent on signs the Federal Reserve will take an aggressive approach in raising interest rates.
“Gold is being reinforced by elevated inflation and heightened geopolitical risk,” said Kelvin Wong, an analyst at CMC Markets in Singapore. Prices rising above the key medium-term technical resistance level of $1,975 is “likely to have attracted momentum-based traders back into the bullish camp,” he said.
The Bloomberg Dollar Spot Index added 0.3 per cent. Palladium, platinum and silver all advanced.
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