{UAH} THE ONLY THING THAT PLUMMETED DURING TRUMP'S ENTIRE PRESIDENCY WAS METALS -> At this point be wise and start buying

Gold touches $1,900 for the first time since June on flare up in Russia-Ukraine tensions

Provided by Dow Jones

Feb 17, 2022 10:04 AM EST

By Myra P. Saefong and Mark DeCambre

Gold futures jumped on Thursday, touching a high of $1,900 an ounce for the first time since June of last year, as a flare-up in tensions between Russia and Ukraine renewed concerns about a wider military conflict.

Officials supporting Russia in the Donbas region have accused Ukraine's armed forces of launching grenades and mortar attacks into the Russia-backed region, which would be a breach of cease-fire agreements.

The accusations come as Moscow has been seen continuing to build up troops along the Ukraine border, despite claiming that it is withdrawing forces, according to U.S. intelligence.

Gold has been reacting to the geopolitical tensions in Eastern Europe, as well as evidence that inflation is surging in many parts of the world in the aftershocks from the COVID-19 pandemic.

Prices for the metal have climbed this month, benefitting mainly from "haven-investment demand brought about by the U.S.-Russia tension over Ukraine and concerns of persistent, elevated inflation," said Jeff Klearman, portfolio manager at GraniteShares, which offers the GraniteShares Gold Trust (BAR).

Against that backdrop, gold for April delivery rose $24.40, or 1.3%, to trade at $1,895.90 an ounce, following a 0.8% gain on Wednesday, which had marked the highest settlement for the most-active contract since June 11, FactSet data show. Prices on Thursday touched a high at $1,900, also for the first time since June.

The upside for gold, however, has been somewhat limited by concerns about central banks plans to raise interest rates to combat high inflation. The minutes released on Wednesday from the Federal Reserve's late-January policy meeting, however, didn't imply that the central bank was adopting a more hawkish stance than investors have already anticipated.

The meeting minutes seemed to indicate the Fed would act to increase rates "more cautiously than previously believed, adding to inflation concerns and supporting gold prices," Klearman told MarketWatch.

He points out that while 10-year real yields have increased 25 basis points since the end of January, from -71 basis points to -46 basis points, they are still negative despite growing expectations the Fed will tighten six or more times this year.

"Even more importantly 10-year inflation expectations have not declined, hovering near 2.5%," Klearman said. "Both these facts indicate the market is not convinced the Fed's current policies are aggressive enough to reduce inflation going forward, which is supportive of gold prices."

March silver also moved up by 11.5 cents, or 0.5%, to $23.72 an ounce, following a 1.1% gain a day ago.

Prices for silver moved up to session highs in the first few minutes after the release of U.S. data on weekly jobless claims and housing starts, as did gold, but both metals then pared back those gains.

In U.S. economic data, new applications for unemployment benefits jumped by 23,000 to 248,000 last week to break a string of recent declines. Meanwhile, U.S. home builders started construction on homes at a seasonally-adjusted annual rate of roughly 1.64 million in January -- roughly 4% decrease from the previous month

In other Comex trading Thursday, March copper edged lower by 0.2% to $4.528 a pound. April platinum lost 2% to $1,084.90 an ounce and March palladium traded at $2,367.50 an ounce, up 4.2%.

-Myra P. Saefong

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