Gold ticks up this morning on Ukraine’s continuing crisis, bouncing off a near a two-week low early Monday amid a tug-of-war between the bullishness of the yellow metal’s safe haven appeal from the war in Ukraine and bearishness of aggressive monetary policy signals by Federal Reserve officials.
Ukraine officials in Kyiv and the city of Mariupol have rejected Russian demands for the surrender of Mariupol in the latest escalation in Russia’s weekslong invasion of Ukraine. U.S. President Joe Biden is scheduled to travel Brussels and Warsaw this week for meetings with Group of Seven, NATO and the European Union allies on the Ukraine crisis.
After announcing a quarter-percentage point interest rate hike last week, Fed policymakers indicated that there will be many more increases over the next two years. Higher interest rates are typically bearish for gold because other assets become more attractive to investors.
Front-month gold futures fell 2.6% last week to $1,933.90 an ounce on Comex after the June contract dropped 0.7% Friday. Gold advanced 5.8% last month after losing 1.8% in January, its worst month since September. It retreated 3.5% in 2021. The April contract is up $5.40 (+0.28%) an ounce to $1,934.70 and the DG spot price is $1,936.00.
Holdings in SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.8% Friday to 1,082.44 metric tons, the highest level since March 2021.
Investors will be looking for further direction this week from developments in Ukraine and scheduled remarks from Fed Chairman Jerome Powell and Atlanta Fed President Raphael Bostic on Monday. European Central Bank President Christine Lagarde is scheduled to speak Tuesday and Bank of England Governor Andrew Bailey and Powell on Wednesday.
Increased cases of the coronavirus in China, Hong Kong and parts of Europe dampened some demand for physical gold in places like India, Reuters reported.
The Dow and Nasdaq off to a weak start today, coming off their best week since 2020. This morning, the Dow Jones Industrial Average shed about 80 points, or 0.2%. The S&P 500 ticked down 0.1%. The Nasdaq Composite eased 0.8%.
Front-month silver futures retreated 4.1% last week to $25.09 an ounce on Comex and fell 2.1% 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 contract is up $0.298 (+1.19%) an ounce to $25.385 and the DG spot price is $25.30.
Spot palladium tumbled 10% last week to $2,420.00 an ounce, though it rallied 0.6% Friday. It touched a record $3,440.76 earlier this month. Russia produces about 40% of the world’s palladium, and the metal’s main use is in catalytic converters for gasoline-powered vehicles. There are already vehicle shortages and price increases for automobiles, and Russia’s Nornickel 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 up $69.50 an ounce to $2,587.50.
Spot platinum decreased 3.8% last week to $1,039.50, though it gained 0.8% 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 $9.00 an ounce to $1,047.90.
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