Gold near 3-month high as Ukraine crisis lifts safe-haven appeal

[BENGALURU] Gold prices edged higher on Tuesday (Feb 15) towards a 3-month peak touched in the previous session, as heightened tensions between Russia and the West over Ukraine prompted investors to pull back from riskier assets and opt for safe-haven bullion.

Spot gold was up 0.1 per cent at US$1,871.52 per ounce, as of 12.52 am GMT. In the previous session, bullion prices marked their highest level since Nov 16 at US$1,873.91.

US gold futures edged 0.2 per cent higher to US$1,873.40.

World shares slid on Monday while oil prices jumped to 7-year highs on warnings from the United States that Russia could soon invade Ukraine and investors scurried to buy safe-haven government bonds they mostly shunned so far this year.

Bullion is usually perceived as a hedge against geopolitical conflicts, and with simmering tensions surrounding Ukraine, spot gold has closed higher in 9 of the previous 11 sessions.

Also supporting bullion, benchmark US 10-year Treasury yields eased, decreasing the opportunity cost of holding non-interest-paying gold.

Japan's economy rebounded in the final 3 months of 2021 as falling coronavirus cases helped prop up consumption, though rising raw material costs and a spike in new Omicron variant infections clouded the outlook.

US Federal Reserve officials continued sparring over how aggressively to begin upcoming interest rate increases at their March meeting, with final inflation reading just ahead of the 2-day session taking on potentially outsized importance.

Among other precious metals, spot silver gained 0.2 per cent to US$23.87 per ounce, while platinum was up 0.2 per cent at US$1,030.11.

Palladium rose 0.3 per cent to US$2,368.33, having hit its highest in nearly 2 weeks on Monday. REUTERS