Spot gold rose 1% to $1,963.04 per ounce, its highest level since March 14. US gold futures they were up 1.4% at $1,963.50.
“Very strong underlying inflationary pressures remain the main supporting factor driving the price of gold. There are other supporting factors, most notably the war in Ukraine,” said David Meger, director of metals trading at High Ridge Futures.
The Federal Reserve raised borrowing costs by 25 basis points on March 16, and since then the US central bank’s top monetary policy makers have signaled a more aggressive approach to fighting inflation.
“Not even the thought of a rising interest rate environment is enough to offset the positive pressures we’re seeing from the inflation skew. We think the Fed is still behind the curve”Meger added.
Gold, which pays no interest, tends to lose its appeal when interest rates rise, but the ongoing conflict in Ukraine and rising oil prices, adding to existing inflationary pressures, have put a support on bullion pricesaccording to analysts.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund (ETF), rose to their highest level since February 2021 on Wednesday.
Western leaders meeting in Brussels agreed to bolster their forces in Eastern Europe, increase military aid to Ukraine and tighten sanctions on Russia, as Moscow’s assault on its neighbor entered a second month.
On the other hand, silver rose 2.2% to $25.61 per ounce, platinum gained 0.5% to $1,025.65 and palladium advanced 0.8% to $2,532.29.
Source: Ambito
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