NEW YORK: Gold jumped to an eight-month high on Thursday and was within striking distance of the key $1,900 an ounce mark after a Russian news report of mortar fire in eastern Ukraine drove investors toward safe-haven assets.
Spot gold rose 1.4% to $1,893.76 per ounce by 11:23 a.m. ET (1623 GMT), after hitting its highest since June 11 at $1,897.41.
US gold futures gained 1.4% at $1,897.80.
Dampening appetite for riskier assets, Russian-backed rebels and Ukrainian forces traded accusations on Thursday that each had fired across the ceasefire line in eastern Ukraine.
“When times really get uncertain and anxiety is running high, gold is still the safe-haven asset to go to,” said Jim Wyckoff, a senior analyst at Kitco Metals.
Meanwhile, Russia expelled deputy US ambassador Bartle Gorman, warning of a US response amid heightened fears of a Russian invasion of Ukraine. US President Joe Biden said the threat of an invasion is “very high.”
“Not only do the events on the Ukrainian border have investors seeking out safe-havens, but it (gold) also offers inflation protection at a time of surging prices and the prospect of higher oil and gas prices, if Russia does invade,” Craig Erlam, senior market analyst at OANDA, said in a note.
Minutes of the latest policy meeting on Wednesday showed that while policymakers agreed that it would “soon be appropriate” to raise the Fed’s benchmark overnight interest rate from its near-zero level, they would re-asses the rate hike timeline at each meeting.
“The latest FOMC minutes did not offer fresh hawkish clues,” Exinity analyst Han Tan said.
Auto-catalyst metal palladium jumped 3.7% to $2,364.76, after hitting a two-week high earlier in the session.
Russia is one of the world’s largest palladium-producing countries and any escalation in its conflict with Ukraine could lead to supply disruptions, analysts said.
Silver gained 1% at $23.78 and platinum climbed 2.4% to $1,087.55, after hitting a three-month high earlier.
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