(Reuters) – Gold hit a near nine-month high on Tuesday, as the situation in Eastern Europe intensified after Russia ordered troops into breakaway regions of eastern Ukraine, supporting demand for safe-haven bullion.
Spot gold was up 0.2% at $1,909.33 per ounce by 0753 GMT, after scaling its highest since June 1 at $1,913.89 per ounce earlier. U.S. gold futures GCv1 gained 0.7% to $1,913.80.
“With the situation deteriorating seemingly by the day in Eastern Europe, there is very little reason to be negative on gold at the moment,” said Jeffrey Halley, a senior market analyst at OANDA.
“Rising stagflationary pressures around the world are also underpinning the precious metal, a situation that will be exacerbated by massive Western sanctions on Russia if they come to play.”
The United States and its European allies are poised to announce harsh new sanctions against Russia on Tuesday after President Vladimir Putin formally recognised two breakaway regions in eastern Ukraine, escalating a security crisis on the continent.
Oil jumped to a seven-year high, safe-havens rallied and U.S. stock futures dived. MKTS/GLOB
U.S. President Joe Biden signed an executive order to prohibit trade and investment between U.S. individuals and the two breakaway regions of eastern Ukraine, the White House said. (Full Story)
U.S. benchmark 10-year yields US10YT=RR slipped on deteriorating Ukraine crisis and U.S. Federal Reserve rate hike bets.
While bullion is considered a hedge against inflation and geopolitical risks, interest rate hikes tend to raise the opportunity cost of holding non-yielding bullion.
Spot gold may test a resistance at $1,920 per ounce, a break above which could open the way towards $1,940, according to Reuters’ technical analyst Wang Tao.
Spot silver rose 0.7% to $24.11 per ounce, platinum gained 0.9% to $1,084.40 and palladium XPD= was up 0.5% to $2,399.07.
(Reporting by Asha Sistla in Bengaluru; Editing by Rashmi Aich)
