Gold News & Info

Source:Bill Musgrave, American Gold Exchange

AustinExtending last week's 1.1% rise, gold added another 0.5% to close near $1,842 after escalating Ukraine tensions and weak US data spurred demand for safe-haven assets.

An invasion of Ukraine by Russia appears imminent after the State Department ordered the families of all US personnel at the US Embassy in Ukraine to leave the country. Britain's Foreign Office accused Moscow of seeking forcibly to install a pro-Russia government.

With economic sanctions having little effect, the Biden Administration is reportedly prepared to deploy 8,500 troops to Eastern Europe and the Balkans, along with aircraft and warships, to reinforce NATO forces.

Volatility ruled the day on Wall Street, with all three major stock indexes plunging into deep losses before battling back to minor gains. Benchmark 10-year Treasury yields pulled back on flights to safety.

Adding to risk-off sentiment, the Markit flash survey of business conditions showed the US economy weakened dramatically late last month because of the widespread infections by the omicron variant of covid. The services sector, which comprises around 70% of the economy, plunged to just above 50, the threshold for contraction. It was the lowest reading in 18 months.

The dollar picked up 0.3% against major rivals, especially the euro, as Forex traders shifted toward its perceived safety.

Against this turbulent backdrop, the Federal Reserve meets tomorrow, with most analyst agreeing that the first meeting of 2022 will be used to prepare the markets for rate hikes coming as early as March.

Rising interest rates boost the dollar, which typically weighs on gold by making it more expensive in other currencies, thereby limiting overseas demand. But with consumer inflation raging at 7%, the highest in 40 years, demand for inflation-hedges is lifting the metal anyway.

The other precious metals were mixed, with silver and platinum falling 2.1% and 1.4%, respectively, while palladium added 1.7%.

At the Comex close: February gold gained $9.90 to $1,841.70; March delivery silver dropped 52 cents to $23.80; April platinum slipped $14.80 to $1,020.30; and March palladium rose $36.70 to $2,141 an ounce.