(Bloomberg) — Gold was little changed near an eight-month high as traders assessed heightened tensions over Ukraine ahead of an expected meeting next week between Russia and the U.S.
The U.S. said Russia has massed as many as 190,000 personnel – including troops, National Guard units and Russian-backed separatists – in and around Ukraine in what it called the most significant military mobilization since World War II. Russia has repeatedly denied it plans to attack. U.S. Secretary of State Antony Blinken and Russia Foreign Minister Sergei Lavrov have agreed to talk.
The standoff between the West and Russia has increased the appeal of haven assets such as gold. The precious metal is set for a third straight weekly gain, its longest run this year, even as the U.S. Federal Reserve is preparing to raise rates, which could damp demand for non-interest bearing gold.
“A rise in Russia risk premium” contributed to the increase in gold prices from the start of February, TD Securities commodity strategists led by Bart Melek said in a note.
Citigroup Inc. analysts including Aakash Doshi upgraded their near-term price forecast to $1,950 an ounce from $1,825, citing the geopolitical tensions. Further out, the bank remains bearish, with a target of $1,750 over six to 12 months as “higher real yields and stronger equities can weigh on bullion prices again.”
Spot gold was 0.1% lower at $1,895.69 an ounce at 11:57 a.m. in New York, after closing at the highest level since June 10 on Thursday. The Bloomberg Dollar Spot Index was up 0.2%. Silver gained, while platinum and palladium fell.
