Metals Stocks: Gold briefly taps highs above $2,000 as Russia intensifies military strikes in Ukraine

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Gold briefly surged above $2,000 an ounce on Monday to its highest prices since August 2020, as Russia’s unprovoked attack of Ukraine saw fresh escalation, and Western countries weighed leveling further sanctions on the Kremlin.

April gold
GCJ22,
+0.83%

GC00,
+0.83%

rose $19.60, or 1%, to $1,986.20 an ounce on Comex, after trading as high as $2,007.50 — the highest intraday level for a most-active contract since August 2020, FactSet data show. On Friday, prices put in a weekly gain of 4.2%, which was the largest such rise for a most-active contract since July 2020.

May silver
SIK22,
-0.13%

SI00,
-0.13%
,
however, edged down by 4.4 cents, or 0.2%, to $25.75 an ounce, after trading as high as $26.37, at the highest levels since July 2021.

“Gold remains an attractive asset to own beyond the geopolitical issues currently dominating the headlines, as the second order consequence of events in the form of stagflation takes root,” Ross Norman, chief executive officer at Metals Daily, told MarketWatch.

However, gold bulls “will be disappointed that with epic events it has achieved only a 10% gain year to date,” he said. It is “often in the nature of gold prices to take a slow, unemotional and considered view of events.”

So gold “has had a problem in sustaining momentum to the upside once again,” said Norman. Still, the $2,000 level should “represent little more than a speed bump all things considered — and true to form, the market failed to hold above that key level…on news of a potential peace deal in the Ukraine.” 

Russia announced a limited cease-fire and the establishment of safe corridors for civilians to flee Ukraine, but evacuation routes led mostly to Russia and its ally Belarus, the Associated Press reported Monday.

Russian forces have killed scores of civilians in cities including Kharkiv, Ukraine’s second-largest metropolis, as the military heads toward the capital of Kyiv, The Wall Street Journal reported Sunday night.

On Sunday, U.S. Secretary of State Antony Blinken said that the White House is considering a coordinated embargo of oil out of Russia, one of the largest producers of crude. That comes as Western nations aim to cripple Russia’s economy in response to its belligerence in Ukraine, which has so far resulted in “selected” Russian banks being removed from SWIFT, the international payment network through which almost all financial information flows.

Against that backdrop, gold has gotten a lift despite concerns that the U.S. Federal Reserve, and other central banks, will be forced to lift benchmark interest rates rapidly to combat a surge in inflation across the globe, which is expected to be amplified by the conflict in Eastern Europe.

Other Comex metals saw mixed trading, with May copper
HGK22,
-4.50%

down nearly 4% at $4.743 a pound. April platinum
PLJ22,
+1.99%

traded at $1,142.10 an ounce, up 2.2%, but June palladium
PAM22,
-2.39%

lost 4.4% to $2,849 an ounce after settling at a record high on Friday.

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