© Reuters. FILE PHOTO: Marked ingots of 99.99% pure gold are placed in a cart at the Krastsvetmet Nonferrous Metals Plant in the Russian Siberian city of Krasnoyarsk on March 10, 2022. REUTERS/Alexander Manzyuk
by Seh Darling
(Reuters) – Gold rose 1 percent on Thursday, supported by a pullback in the dollar and U.S. Treasury yields, as investors cautiously watched progress in talks between Russia and Ukraine.
It was up 1% at $1,948.06 an ounce at 11:21 a.m. ET (1521 GMT). The U.S. rose 2 percent to $1,947.70 an ounce.
Miguel Perez-Santalla, head of trading sales and marketing at Heraeus Metal Management in New York, said that with a weaker dollar and the situation in Ukraine still in the background, people started buying gold in large quantities.
“Gold is going to keep trying to move higher, there’s a lot of demand and a lot of worry behind it. We could go above $2,000 again,” Perez-Santalla said.
Signs of progress in talks to end Russia’s so-called “special military operation” helped global stock markets soar this week, but the Kremlin said no deal had been reached.
The dollar and U.S. Treasury yields fell a day after the Federal Reserve raised interest rates by 25 percentage points, with investors already pricing in a stronger rate hike.
While rising U.S. interest rates typically weigh on gold because they increase the opportunity cost of holding non-yielding assets, gold investors seem to pay little attention to Fed rate hikes, which are largely in response to soaring inflation.
Independent analyst Ross Norman said: “If you had to look at one thing to encourage you to believe that this bull market has taken hold, then you look at ETF (exchange-traded fund) liquidity, which is really positive. .”
Holdings in SPDR Gold Trust (P: ), the world’s largest gold-backed ETF, rose to their highest level since March 2021 at 1,070.53 tonnes.
Spot silver gained 1.6% to $25.47 an ounce, while platinum gained 0.6% to $1,024.00. Palladium rose nearly 5 percent to $2,529.13 an ounce.
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