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Metals Stocks: Gold ends higher, extends rise after bell on Fed worries, Ukraine jitters

Gold futures ended higher Friday, posting weekly gains as the yellow metal found support after a continued surge in inflation. Gains were extended in electronic trade after the bell after the White House warned that a Russian invasion of Ukraine could happen “any day now.”

Gold for April delivery
GC00,
+1.38%

GCJ22,
+1.38%

rose $4.70, or 0.3%, to close at $1,842.10 an ounce on Comex, for a 1.9% weekly rise. After the bell, gold, a traditional haven during periods of geopolitical uncertainty, extended its rise, trading below $1,860 an ounce in recent action.

White House National Security Adviser Jake Sullivan told reporters that while the U.S. hadn’t concluded that Russian President Vladimir Putin had made a final decision, an invasion next week as Winter Olympic Games continue in Beijing was a possibility.

“Gold could rally above the $1,900 level if troop movements occur,” said Edward Moya, senior market analyst at Oanda, in a note. “Gold traders would not want to be short heading into the weekend.”

March silver
SIH22,
+0.48%

fell 0.6% to $23.52 an ounce.

Gold extended its winning streak to a fifth session on Thursday, even as data showed the January consumer-price index rose at a hotter-than-expected year-over-year rate of 7.5%. Treasury yields rose sharply as investors priced in a more aggressive Federal Reserve and St. Louis Federal Reserve Bank President James Bullard called for 100 basis points of rate increases by July 1.

Rising yields can be a drag on gold because they raise the opportunity cost of holding nonyielding assets.

“We should note that rising inflation and the return of positive yields could be challenging…for precious metals. But so far investors are still trusting gold, which could be an interesting hedging in case of market disruption,” said Carlo Alberto De Casa, external market analyst at Kinesis Money, in a note.

“In this scenario, gold is also representing a hedge in case central banks would not be able to contain inflation,” he said.

In other metals trade, April platinum
PL00,
-0.67%

fell 2.3% to $1,018.70 an ounce, while March palladium
PA00,
+2.37%

dropped 3.2% to $2,193.60 an ounce.

March copper futures
HG00,
-3.87%

dropped 3.2% to $4.51 a pound.

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