Oil and gold prices RISE after Syrian airstrike
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The gain can be attributed to the combination of geopolitical concerns over the Russia-Ukraine conflict and soaring US inflation. These factors drove a horde of safe-haven buyers into the yellow metal.
Gold’s most active contract on New York’s Comex, April, slipped $2.20 to settle Friday’s trade down 0.1 percent at $1,899.80 an ounce ahead of the long weekend break leading into Monday’s market holiday for President’s Day in the US.
For the week, the benchmark gold futures contract rose 3.1 percent, its most for a week since November.
Earlier on Friday, it hit an intraday peak of $1,905, marking an eight-month high with June being the last time gold reached $1,900 levels.
Ed Moya, analyst at online trading platform OANDA told investing.com: “Gold prices have had quite a February and should find key resistance around the $1,930 level.
“With Monday being a holiday in the US that might hold if Ukraine tensions do not escalate further.”
“In just a couple of months, investors have done an about-face with gold.
“Wall Street has gone from expecting robust economic growth around 4 percent this year and a return to normal next year, to fears that aggressive Fed tightening could invert the curve next year and send this economy into a recession early in 2024.”
Russian-backed rebels and Ukrainian forces traded accusations on Thursday that each had fired across the ceasefire line in eastern Ukraine.
The escalating tensions reinforced gold’s investment appeal while dampening appetite for riskier assets.
Jim Wyckoff, a senior analyst at Kitco Metals, told Reuters: “When times really get uncertain and anxiety is running high, gold is still the safe-haven asset to go to.”
On Wednesday, minutes from the Federal Reserve’s January meeting revealed US policymakers’ intention to begin raising interest rates to curb inflation, which would translate into higher opportunity cost of holding bullion.
The US economy grew by 5.7 percent in 2021, its fastest since 1984, from a 3.5 percent contraction in 2020 caused by the coronavirus pandemic.
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But inflation grew even faster, with the Consumer Price Index expanding 7.0% in the year to December, its most since 1982.
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