Gold clears US$1,900 level as Ukraine standoff intensifies

[BENGALURU] Gold prices on Friday (Feb 18) were at their highest since June 2021 as mounting tensions between Russia and the West over Ukraine lifted bullion's safe-haven appeal, buttressed by lower US bond yields.

Spot gold rose 0.3 per cent to US$1,902.20 per ounce, as of 12.33 am GMT, its highest in 8 months. US gold futures added 0.1 per cent to US$1,904.30.

Safe-haven debt rose on Thursday after US President Joe Biden said there was every indication Russia planned to attack Ukraine, while Moscow accused Washington of ignoring its security demands.

One of the deepest crises in post-Cold War relations is playing out in Europe as Russia wants security guarantees, including Kyiv never joining Nato, and the US and allies offer arms control and confidence-building measures.

While Russia accuses the West of hysteria, many Western countries are adamant that the military build-up is continuing ahead of a possible assault.

On Thursday, gold prices rose as much as 1.8 per cent, breaking past US$1,900/oz for the first time since Jun 11, 2021, with analysts expecting a further rally if tensions continue to escalate.

Spot gold is now set for a third straight weekly gain, having added about 2.2 per cent so far.

A dip in Benchmark US 10-year Treasury yields decreased the opportunity cost of holding non-interest-paying bullion.

Elsewhere, Japan's core consumer prices rose for a fifth straight month in January, but at a slower pace than in the previous month.

Spot silver was up 0.2 per cent at US$23.86 per ounce and palladium rose 0.8 per cent to US$2,385.08, with both set for weekly gains of about 1.3 per cent and 3.4 per cent respectively.

Platinum gained 0.5 per cent to US$1,094.83, its highest since mid-November, setting up its best weekly showing since June. REUTERS