Gold extended its streak of gains on Wednesday as demand for the safe-haven metal continued to rise against soaring inflation amid the Russia-Ukraine war.
Spot gold rose 0.6% to $1,979.66 per ounce by 12:30 p.m. ET, its highest in a month. US gold futures were up 0.3% to $1,981.80 per ounce in New York.
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Gold’s recovery comes at a time when bullion is enduring pressure from expectations of an aggressive US interest rate hike and a robust dollar. Supporting this gold rally is the latest US inflation data, which showed monthly consumer prices are still surging.
Gold seems to be “ignoring the stronger dollar and rising US rates, and they seem to be singularly focused on inflation,” Edward Meir, an analyst with ED&F Man Capital Markets, told Reuters.
“We’re importing inflation here,” said Daniel Pavilonis, senior market strategist at RJO Futures, adding there is “real scare of more inflation coming from the lack of exports, the lack of shipments and back orders and all the other shipping costs” due to the Ukraine crisis.
Russian President Vladimir Putin said on Tuesday peace talks with Ukraine had hit a dead end, which signals that the war could grind on for longer, adding further support for gold.
(With files from Reuters)