By Asha Sistla
(Reuters) – Gold prices jumped more than 2% on Thursday to their highest in over a year and palladium extended a rally as Russia launched an all-out invasion of Ukraine after President Vladimir Putin authorised what he called a special military operation.
Spot gold XAU= climbed 1.8% to $1,941.50 per ounce by 0841 GMT, after hitting the highest since January 2021 at $1,948.77. U.S. gold futures GCv1 jumped 1.7% to $1,943.20.
Russian missiles rained down on Ukrainian cities. Ukraine reported columns of troops pouring across its borders into the eastern Chernihiv, Kharkiv and Luhansk regions, and landing by sea at the cities of Odessa and Mariupol in the south.
“Gold is a safe-haven asset along with the U.S. dollar, and this is its day. We could inevitably see new all-time highs in gold,” Jeffrey Halley, a senior market analyst at OANDA, said.
Prices could continue rallying towards a resistance at $1,960 an ounce and test $2,000 in the next few sessions, Halley added.
Gold has risen about 8% in February so far as the Russia-Ukraine crisis walloped risk appetite. The metal is headed for its best monthly performance since July 2020.
“The market is very volatile and gold is clearly the primary trade on this dynamic at the moment… as long as sanctions keep getting slapped on Russian institutions and individuals, it is going to be ideal for gold,” IG Markets analyst Kyle Rodda said.
Russia is the world’s third-largest producer of gold, while Moscow-based Nornickel GMKN.MM is also a major producer of palladium and platinum.
Spot palladium added 3% to $2,557.34 an ounce, having earlier reached its highest since August 2021.
Silver gained 2.1% to $25.04 per ounce, and platinum rose 1.5% to $1,108.04.
The dollar and oil prices also rocketed higher, while global stocks and U.S. bond yields dived.
“It’s just not the fog of war for gold, but also inflation, especially with oil hitting $100 a barrel, and that’s why gold is becoming a defensive product,” Stephen Innes, managing partner at SPI Asset Management, said.
(Reporting by Asha Sistla and Bharat Govind Gautam in Bengaluru; Editing by Devika Syamnath)
