Gold prices rose in trading on Thursday, after news of the return of tensions between Russia and Ukraine, in the wake of a Russian report that mortar shells were fired in eastern Ukraine, prompting investors to resort to safe assets.
Yesterday, Wednesday, gold prices ended up by about $15, with the dollar and US stocks falling.
Gold Prices Today
The price of gold futures contracts – for delivery in April – rose by 0.78%; equivalent to $14.60, to reach the level of $1886.10 an ounce.
The spot price for the yellow metal also rose by 0.93%, to reach $1886.43 an ounce.
At the same time, the price of silver futures contracts – for March delivery – increased by 0.31%, recording $23.64 an ounce.
The spot platinum price also rose by 1.16% at $1076.71 an ounce, while the spot palladium price rose by 1.59%, to record the level of $2,312.83 an ounce.
Political Tensions
Russia-backed separatists in eastern Ukraine accused Kiev government forces on Thursday of opening fire on their territory and said they were trying to find out if anyone had been injured or killed, a news Ukraine denied.
The report comes at a time when Russia has massed more than 100,000 troops near Ukraine’s borders; This raised fears of a possible invasion.
“The classic risk aversion took place late in the Asian session, as stock index futures fell, gold and the yen rose,” said Matt Simpson, chief market analyst at City Index.
“Traders are now waiting for any follow-up to see how this escalates,” he added, Reuters reported.
He noted that in the event that Russia invaded Ukraine; Gold is likely to rise, but seeing a sharp reversal causing gold to fall significantly is likely to require seeing Russian forces actually leave the border.
Dollar Rise
The US dollar regained strength after reports of the attack, limiting the gains of gold priced in the US currency.
Gold also received a boost after minutes of the last policy meeting suggested the Federal Reserve was less hawkish on concerns, said Gold Silver Central Managing Director Brian Lane.
Higher interest rates tend to increase the opportunity cost of holding interest-free gold, but the decline in US Treasury yields supports the yellow metal.
Source: XglobalMarkets
