Interest in bullion led to a rise in the price of gold on Monday. This interest was triggered by the news that some Western countries want to formally restrict imports of the metal from Russia as punishment for Russia’s invasion of Ukraine.
Gold prices on the spot market increased by 0.5 percent, reaching $1,835.75 per ounce as of 05:20 GMT. The price of gold futures in the United States was up 0.4 percent, reaching $1,837.30.
“The G7 import embargo on Russian gold seems to be giving some short-term support in early Asia (trade),” said Jeffrey Halley, a senior analyst at OANDA.
On Sunday, four of the wealthy countries that make up the Group of Seven (G7) decided to restrict the import of gold from Russia in an effort to increase the pressure that is being put on Moscow as a result of the sanctions and deprive it of the means by which it can finance its invasion of Ukraine.
According to Stephen Innes, managing partner at SPI Asset Management, “The headline will be quickly digested, and the market should go back to its tug of war between higher front-end rates, which are detrimental to gold, and recession odds, which mean sooner rate cuts, which are advantageous to gold.”
Even as investors celebrated economic data showing inflation predictions to be less worrying than was originally thought, a couple of central bankers from the United States said on Friday that they backed future strong rate increases to prevent fast price rises.
Gold is considered to be a hedge against inflation; nevertheless, the opportunity cost of owning bullion, which does not generate any return, increases as interest rates rise.
According to Halley, “Overall, gold remains bogged in the centre of the $1,780-$1,880 range that has been in place since early May,” and in order to shift that dynamic, “we will need a major directional move by the U.S. dollar.”
Spot prices for silver increased by 1.3 percent, reaching $21.38 per ounce, while platinum gained 0.7 percent, reaching $913.51, and palladium increased by 2.6 percent, reaching $1,925.31.