Gold hits $2,000/oz as Ukraine-Russia conflict worsens

Bengaluru — Gold prices hit $2,000 for the first time in 1-1/2 years, with investors rushing to the safe-haven metal as the Russia-Ukraine crisis worsens, while supply disruption fears sent palladium to an all-time high on Monday.

Spot gold was up 1.1% at $1,990.20 an ounce by 7.51am GMT, after scaling its highest since August 19, 2020 at $2,000.69 earlier in the session. US gold futures rose 1.4% to $1,993.30.

“Gold will likely find some heavy traffic around the $2,000 level initially, but once it is cleared, assuming no change in the Ukraine situation, it will quickly move to the $2,100 region and on to new all-time highs,” said Oanda senior analyst Jeffrey Halley.

Fighting stopped about 200,000 people from evacuating the besieged Ukrainian city of Mariupol for a second day in a row on Sunday, as Russian President Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered.

Holdings of the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, rose to their highest since mid-March 2021 on Friday.

Spot gold may keep rising towards $2,065 an ounce, according to Reuters’ technical analyst Wang Tao. Palladium jumped 8.7% to $3,263.25 per ounce, on course for its best day since March 2020, after hitting an all-time high of $3,315 earlier.

Russia accounts for 40% of global production of the metal, used by automakers in catalytic converters to curb emissions.

“We’re looking at a very significant pickup in concerns around the disruptions with Ukraine seemingly because the conflict is showing signs of broadening,” said Ilya Spivak, a currency strategist at DailyFX, pointing to speculations about more Western sanctions, perhaps even a formal ban on Russian oil imports.

Spot silver rose 0.5% to $25.79 an ounce, while platinum gained 2.7% to $1,151.51.

Reuters