Gold surged above the $2,000-an-ounce threshold early Monday after the weekend’s escalations in Russia’s invasion of Ukraine. The yellow metals has since backed off on profit-taking. Palladium also traded at a record high amid supply concerns.
It was the first time gold had topped $2,000 since August 2020. Ukrainian defense officials have warned that Russia is about to begin an all-out assault on Ukraine’s capital of Kyiv. Meanwhile, a ceasefire to create a humanitarian corridor and evacuate civilians from Ukraine collapsed over the weekend. The U.S. government asserts that 95% of Russia’s firepower is now in Ukraine.
Front-month gold futures rose 4.2% last week to $1,966.60 an ounce on Comex after rallying 1.6% Friday. Gold gained 5.8% last month after dropping 1.8% in January, its worst month since September. It retreated 3.5% in 2021. The April contract is currently up $18.70 (+0.54%) an ounce to $1,979.60 an ounce and the DG spot price is $1,982.30.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.4% Friday to 1,054.3 metric tons, the highest level in almost a year.
Spot palladium rose 25% last week to $3,000.50 an ounce and after rising 7.2% Friday. Russia produces about 40% of the world’s palladium, and the metal’s man use is in catalytic converters for gasoline-powered vehicles. There are already vehicle shortages and price increases for automobiles, and Russia’s Nornickel Mining Company is the world’s largest supplier of palladium. The metal gained 5.3% last month after rallying 24% in January. It retreated 22% in 2021. Currently, the DG spot price is down $124.40 an ounce to $2,935.50.
Russian President Vladimir Putin on Sunday doubled down on plans to continue the Ukraine invasion in remarks until the embattled nation accepts his demand. Meanwhile, oil prices surged as the U.S. and Western powers contemplated banning imports of Russian crude.
Investors continued to closely watch inflation, which has worsened from the highest level in decades because of the Ukraine conflict, as well as comments from Federal Reserve officials about what to do about it.
A strong U.S. February jobs report Friday makes it likely that the Fed will move forward with a highly anticipated rate increase next week. The economy added 678,000 jobs last month, surpassing economists’ expectations, as the unemployment rate dropped to 3.8%. Fed Chairman Jerome Powell told a congressional panel last week that he would support a quarter-point rate increase at next week’s meeting.
The personal consumption expenditures price index,, which the Fed uses to track inflation, rose the most year-on-year since 1982 in January, according to data released last week. High inflation is bullish for gold, though rate increases are bearish.
Front-month silver futures advanced 7.4% last week to $25.79 an ounce on Comex after increasing 2.3% Friday. Silver surged 8.8% in February after dropping 4.1% in January. It fell 12% in 2021. Silver prices are tied to industrial demand. The May contracts are down $0.159 (-0.62%) an ounce currently to $25.630 and the DG spot price is $25.54.
Spot platinum gained 5.9% last week to $1,121.50 an ounce after rising 3.2% Friday. The metal advanced 1.7% in February after rising 5.7% in January. It lost 9.4% last year. The DG spot price is currently up $13.70 an ounce to $1,134.50.
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