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Tuesday, May 24, 2022

US MIDDAY: Gold jumps

NEW YORK: Gold rose more than 1% on Wednesday as a retreat in the dollar and geopolitical tensions surrounding Ukraine burnished safe-haven bullion’s appeal, sparking a rally in precious metals.

Palladium led the gains with a rise of as much as 7%, with Citi Research saying in a note a gradual recovery in global automotive output could underpin demand for the auto-catalyst metal this year. It was last up 5.8% at $2,007.96 per ounce.

Spot gold climbed 1.5% at $1,840.77 per ounce by 12:47 p.m. ET (1747 GMT), while U.S. gold futures gained 1.7% to $1,842.90.

A slide in the dollar made bullion cheaper for buyers holding other currencies, while a retreat in the benchmark 10-year Treasury yields from a two-year peak also boosted demand for the metal.

The drop in yields has driven a technical breakout in gold, but it may still trade within the overall $1,800 to $1,840 range until the U.S. Federal Reserve meeting next week, said Ed Moya, a senior market analyst at brokerage OANDA.

Expectations that the Fed would tighten monetary policy as soon as March have weighed on bullion this year because higher interest rates increase the opportunity cost of holding gold.

Gold may also be finding support from geopolitical tensions around Ukraine and the Middle East, Moya said.

U.S. Secretary of State Antony Blinken said earlier in the day Russia could launch a new attack on Ukraine at very short notice but Washington would pursue diplomacy as long as it could.

The yellow metal also benefited from its appeal as a hedge against inflation as oil prices rose to their highest since 2014, sparking concerns that price pressures could intensify.

Among other precious metals, platinum jumped 4.3% to $1,023.53 and spot silver rose 2.8% to $24.11 per ounce.

US MIDDAY: Gold jumps

Source: Brecorder

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