Gold prices fell in trading on Thursday, with the stability of high-risk assets, but the precious metal is still heading towards achieving a second consecutive weekly gain, driven by the safe haven demand caused by the Ukrainian crisis and the expansion of inflationary pressures.
On Wednesday, gold prices ended higher, for the fifth consecutive session, amid fears of an escalation of the conflict between Russia and Ukraine.
Gold Prices Today
The price of gold futures contracts – for delivery in June – decreased by 0.34%, to reach the level of $ 1978 an ounce.
Gold prices have risen by about 1.4% so far this week, as most markets will be closed tomorrow, Friday, for a holiday.
And the spot price for the yellow metal fell by 0.14%, to reach $1975.34 an ounce.
At the same time, the price of silver futures contracts – May delivery – decreased by 0.37%, at $25.62 an ounce.
The spot platinum price also decreased by 0.85% at $979.12 an ounce, in contrast, the spot palladium price rose 2.40% at $2363.98 an ounce.
Inflation In America
Asian stocks followed Wall Street higher, on hopes that US inflation might approach a peak, even though several major central banks aggressively raised interest rates.
“The political risk premium by escalating the Ukraine war is building up again, driving all the prices up in public goods, and that created that inflation environment,” said Stephen Innes, managing partner at SBI Asset Management.
US monthly producer prices rose by the most in more than 12 years in March, amid strong demand for goods and services, the latest sign of persistent high inflation that could force the Federal Reserve to tighten monetary policy aggressively.
“Gold is trending at the moment and is mainly supported by what we’ve heard from the Federal Reserve and the US inflation data,” said Brian Lane, managing director at Goldsilver Central.
Meanwhile, US President Joe Biden announced, on Wednesday, an additional $800 million in military aid to Ukraine, ahead of an expected broader Russian offensive in eastern Ukraine.
Non-yielding bullion is a safe store of value in times of uncertainty and a hedge against inflation.
The dollar index, which measures the US currency against a basket of several major currencies, also fell from its highest levels in May 2020, after the decline in Treasury yields, which makes gold without a return more attractive to owners of other currencies.