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Metals Stocks: Gold taps highest levels 17 months as Russian invasion in Ukraine sparks flight to safety

Gold futures were surging on Thursday, rising to their highest intraday levels since September 2020, as Russia launched an invasion of Ukraine, igniting a flight to perceived havens as investors fret that the latest geopolitical actions will destabilize economies and intensify inflationary pressures.

“Markets are in full risk-off mode,” and gold has broken out of a one-and-a-half year-long “bullish consolidation” and tested key resistance of $1,965 early Thursday, said Paul Wong, market strategist at Sprott.

April gold
GCJ22,
+0.98%

GC00,
+0.98%

was up $14.80, or 0.8%, at $1,925.20 an ounce, after touching a high of $1,976.50 — the highest for a most-active contract since September 2020, FactSet data show.

“We continue to see gold as an under-owned safe-haven asset,” said Wong. “There was a significant reduction in investment in gold last year which is now in the process of reversing.”

Read: Ukraine invasion sends wheat, corn and oil soaring because Russia is a ‘commodity superstore’

The surge in gold values came even as the dollar was up 1.4%, as measured by the ICE U.S. Dollar Index
DXY,
+1.52%
.
A richer dollar would ordinarily serve as a headwind for dollar-pegged commodities such as gold but a retreat in yields for government debt also was helping to counter currency moves. The 10-year Treasury note
TMUBMUSD10Y,
1.945%

yields 1.93%, down 4 basis points, compared with Wednesday afternoon. Rates fall as prices for government debt rise.

In other Comex dealings, palladium was a standout given the risk to supplies from Russia, which is the metal’s largest producer. March palladium
PAH22,
+6.67%

rose 7% to $2,612.50 an ounce. April platinum
PLJ22,
-1.04%
,
however, edged down by 0.9% to $1,082.50 an ounce.

March silver
SIH22,
+1.15%

added 1% to $24.785 an ounce, while May copper
HGK22,
+0.11%
,
which is now the most active, tacked on 0.1% to $4.493 an ounce.

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