BY ONOME AMUGE
Gold futures plunged as the dollar strengthened against its rivals, hurting appetite for bullion for buyers overseas, while the safe-haven demand for the yellow metal spurred by Russia’s invasion of Ukraine lost momentum.
As a result, gold plummeted for a second consecutive week to its biggest weekly decline in percentage terms, since November.
The most-active gold futures contract on New York’s Comex was down $13.90, or 0.7 percent at $1,929.30 an ounce. For the week, the benchmark gold futures contract fell 2.8 percent, its most since the week to November 19, 2021.
Ed Moya, analyst for Europe at online trading platform, OANDA, explained that the dollar is seeing massive inflows, leading to a short-term “troubling” for commodities, particularly gold.
Moya added that the dollar will benefit from a rapidly improving interest rate differential and steady safe-haven flows as investors get worried over the impact the war in Ukraine has on inflation.
Craig Erlam, senior market analyst at OANDA, asserted that gold will remain well supported, adding that the demand for safe havens and inflation hedges remain strong.
As for other precious metals, silver was down 0.3 percent to $25.25 per ounce, while platinum gained 1.4 percent to $1,034.87 per ounce.
Palladium rose 2.3 percent to $2,567.61 per ounce, but suffered a weekly fall of about 8.8 percent as fears about supply from top producer, Russia, eased.
Matt Simpson, senior market analyst at City Index, UK, said China’s intent to tackle COVID-19 with minimal impact to the economy and people’s lives, and promise of further stimulus, have brought palladium bulls back to the table.
This, according to Simpson, follows many sessions of volatile price action that saw platinum, palladium and key metals drop to technical support levels after sharp rallies.