Gold prices gained on Monday, as news of
some Western nations planning to officially ban imports of the
metal from Russia for its invasion of Ukraine sparked some
interest in bullion.
Spot gold rose 0.5% to $1,835.75 per ounce by 0520
GMT. U.S. gold futures were up 0.4% at $1,837.30.
“The G7 import ban on Russian gold seems to be providing
some short-term support in early Asia (trading),” OANDA senior
analyst Jeffrey Halley said.
“However, it is mostly a rubber stamp exercise in reality
for the grouping, and I do not expect this to mark a structural
change in the supply/demand outlook that will underpin prices.”
Four of the Group of Seven (G7) rich nations moved to ban
imports of Russian gold on Sunday to tighten the sanction
squeeze on Moscow and cut off its means of financing the
invasion of Ukraine.
“The headline will be quickly digested, and the market
should go back to its tug of war between higher front-end rates,
negative for gold, and recession odds meaning sooner rate cuts,
positive for gold,” said Stephen Innes, managing partner at SPI
A pair of U.S. central bankers said on Friday they supported
further sharp rate hikes to stem rapid price rises, even as
investors cheered economic data showing inflation expectations
to be less worrisome than initially feared.
Gold is seen as a hedge against inflation, but higher
interest rates raise the opportunity cost of holding bullion,
which yields no interest.
“Overall, gold remains mired in the middle of the
$1,780-$1,880 range that’s been in place since early May, and we
will need a large directional move by the U.S. dollar to change
that dynamic,” Halley said.
Spot silver rose 1.3% to $21.38 per ounce, platinum
gained 0.7% to $913.51, and palladium climbed 2.6%
(Reporting by Bharat Govind Gautam in Bengaluru; Editing by
Rashmi Aich and Subhranshu Sahu)