Gold set for third weekly gain in 4 as Ukraine conflict deepens

[BENGALURU] Gold on Friday (Mar 25) was on course for a third weekly gain in 4, as the Russia-Ukraine conflict escalated while the spike in oil prices this week increased demand for bullion as a safe-haven asset and an inflation hedge.

Spot gold was up 0.2 per cent at US$1,960.84 per ounce, as of 1.19 am GMT. US gold futures were flat at US$1,961.70.

The metal hovered near a 1-week high scaled in the previous session and jumped nearly 2 per cent so far this week.

Western leaders piled on military and humanitarian aid for Ukraine on Thursday and denounced Moscow's invasion of its neighbour as "barbarism" as thousands in besieged cities sheltered underground from Russian bombardment.

British Prime Minister Boris Johnson said on Thursday there was evidence that Russia was trying to get round sanctions using its gold reserves.

The US Federal Reserve raised borrowing costs by 25 basis points on Mar 16, and since then top US central bank policymakers have signalled a more aggressive approach to monetary policy tightening this year to fight rising inflation.

Higher interest rates dims non-yielding bullion's appeal, but the uncertainty over the Ukraine crisis and spike in oil prices have added to the existing inflationary pressure underpinning gold prices, analysts said.

The strength in the job market reported by the Labour Department on Thursday may push the Federal Reserve to raise interest rates by half a percentage point at its next policy meeting in May.

Spot silver rose 0.5 per cent to US$25.64 per ounce, while platinum gained 0.6 per cent to US$1,026.90 and palladium added 0.2 per cent to US$2,527.69. REUTERS