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Metals Stocks: Gold prices mark highest finish in more than 5 weeks as Russia-Ukraine war feeds inflation

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Gold futures rose Monday as U.S. traders returned from a three-day weekend, with little prospect for a quick end to Russia’s invasion of Ukraine in sight contributing to global inflation and supporting haven demand for the precious metal and lifting prices to highs above $2,000 an ounce.

“Gold directly benefits from the  Russia-Ukraine conflict inflation effects, which are now more meaningful than direct military developments, in a market sense,” said Stephen Innes, managing partner at SPI Asset Management, in a daily note. “These consequences have fabricated a hyperinflationary environment that sees gold investors stocking up on paper and [the physical metal] for the eventual procession to recession.”

Gold for June delivery
GC00,
+0.41%

GCM22,
+0.41%

was up $18.90, or 1%, at $1,993.80 an ounce on Comex, after touching a high at $2,003. Prices rose 1.5% for last week’s holiday-shortened week. May silver
SIK22,
+1.36%

was up 54.5 cents, or 2.1%, at $26.245 an ounce, after last week’s 3.5% gain. Gold snapped a five-day winning streak on Thursday. U.S. markets were closed for Good Friday.

Apparent Russian missile attacks rocked the western Ukraine city of Lviv Monday, killing at least six, as the country prepared for an all-out Russian assault on eastern Ukraine. Ukrainian troops were holding out in the southeastern port city of Mariupol, which has been largely destroyed, after rejecting Russian demands to surrender.

Gold has rallied on apparent haven demand even as yields on Treasurys have risen and the U.S. dollar has strengthened — both typically seen as negatives for the precious metal.

“Either safe-haven demand has nullified these negative forces or some central bank is acting like a whale, using this opportunity to load up on bullion,” said Marios Hadjikyriacos, senior investment analyst at XM, in a note. “The crippling sanctions on the Russian central bank made it clear that FX reserves are not as solid as gold in a crisis. The next resistance barricade is the psychological $2,000/ounce region.”

In other Comex metals trading Monday, May copper
HGK22,
+1.61%

tacked on 1.5% to $4.792 a pound. July platinum
PLN22,
+2.41%

rose 2.7% to $1,021 an ounce and June palladium
PAM22,
+2.93%

traded at $2,398 an ounce, up 1.8%.

AI Eye Podcast 684: Stocks discussed: (NYSE: $PATH) (NasdaqGM: $IPA)

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