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Gold futures were surging on Thursday, rising to their highest levels in more than a year, and on track for the sharpest daily rally in about two years 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.
“Given gold’s breakout had already started several days ago in anticipation of a potential Russian invasion. With several key levels broken, there is not much in the way of resistance until just shy of $1960, the high from 2021, followed by the psychologically-important $2,000 level, wrote Fawad Razaqzada, market analyst, at ThinkMarkets, in a daily research report.
April gold
GCJ22,
GC00,
surged $52.80, or 2.8%, at $1962.50 an ounce, after rising 0.2% on Wednesday, with those levels representing highs for a most-active contract settlement not seen since around January 2021, FactSet data show.
Razaqzada said that if the conflict in Ukraine intensifies in Eastern Europe that gold could approach its record high.
“The all-time high comes in at $2,075, hit in 2020. Key support is at around the $1900-$1920 range, which was previously resistance,” the analyst wrote.
The surge in gold values came even as the dollar was up 1%, as measured by the ICE U.S. Dollar Index
DXY,
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,
yields 1.87%, down 11 basis points, compared with Wednesday afternoon. Rates fall as prices for government debt rise.
