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Gold up as G-7 nations plan to ban Russian bullion imports

Gold prices

Spot gold advanced 0.5% to $1,835.58 per ounce and U.S. gold futures rose 0.3% to $1,836.30

Gold prices rose on Monday, as news of some Western nations planning to ban imports of the metal from Russia amid the Ukraine war sparked some interest in bullion.

Spot gold advanced 0.5% to $1,835.58 per ounce by 0231 GMT. U.S. gold futures rose 0.3% to $1,836.30.

The G-7 import ban on Russian gold seems to be providing some short-term support in early Asia trading, OANDA senior analyst Jeffrey Halley said.

However, it is mostly a rubber stamp exercise in reality for the grouping, and I do not expect this to mark a structural change in the supply/demand outlook that will underpin prices, Halley said.

Four of the G-7 nations moved to ban imports of Russian gold on Sunday to tighten the sanctions on Moscow and cut off its means of financing the invasion of Ukraine.

The headline will be quickly digested, and the market should go back to its tug of war between higher front-end rates, negative for gold and recession odds meaning sooner rate cuts, positive for gold, said Stephen Innes, managing partner at SPI Asset Management.

A pair of U.S. central bankers said on Friday they supported further sharp rate hikes to stem rapid price rises, even as investors cheered economic data showing inflation expectations to be less worrisome than initially feared.

Gold is seen as a hedge against inflation, but higher interest rates raise the opportunity cost of holding bullion, which yields no interest.

Overall, gold remains mired in the middle of the $1,780-$1,880 range that’s been in place since early May, and we will need a large directional move by the U.S. dollar to change that dynamic, Halley said.

Spot silver gained 1.2% to $21.36 per ounce, platinum advanced 0.5% to $912.00 and palladium jumped 0.6% to $1,886.65.

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