Gold bounces on dollar retreat as focus turns to Ukraine crisis
Reuters
Published Mar 17, 2022 07:20AM ET
Updated Mar 17, 2022 11:35AM ET
By Seher Dareen
(Reuters) - Gold rose 1% on Thursday, supported by a retreat in the U.S. dollar and Treasury yields, with investors cautiously watching the developments of talks between Russia and Ukraine.
Spot gold rose 1% to $1,948.06 per ounce by 11:21 a.m. ET (1521 GMT). U.S. gold futures rose 2% to $1,947.70 per ounce.
With a weaker dollar and the Ukraine situation still in the background, people have started piling into gold, said Miguel Perez-Santalla, head of trading sales and marketing at Heraeus Metal Management in New York.
"Gold is going to continue to try to test higher, it's got a lot of demand behind it and a lot of concerns. We could over $2,000 again," Perez-Santalla said.
Signs of progress in talks to end what Russia calls "a special military operation" had helped global stocks surge this week, but the Kremlin said there was no deal yet.
The dollar and Treasury yields eased a day after the Federal Reserve raised interest rates by a quarter percentage point, with investors having priced in an even stronger rate hike.
While rising U.S. interest rates normally tend to pressure gold since they increase the opportunity cost of holding the non-yielding asset, bullion investors seems to take little notice of the Fed hike, since it was mostly a given to tackle soaring inflation.
"If you had to look at one single thing to encourage you that this bull run has got legs, you'd be looking at ETF (exchange-traded fund) flows and that's really positive," independent analyst Ross Norman said.
Holdings of the world's largest gold-backed ETF, SPDR Gold Trust (P:GLD), have risen to the highest since March 2021 at 1,070.53 tonnes.
Spot silver rose 1.6 % to $25.47 per ounce, while platinum inched up 0.6% to $1,024.00. Palladium rose nearly 5% to $2,529.13 per ounce.
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Written By: Reuters
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