Russia's accusations of provocative actions against Ukraine have escalated tensions. As a result, the price of gold rose more than one and a half percent to the range of 1897.
The increase in gold prices became more significant in the trading session on Thursday (17/February) night. Having previously boosted the weakening of the US Dollar after the FOMC minutes, the escalation of the Russia-Ukraine conflict has now catapulted gold prices further. XAU/USD is up 1.53% to $1897.64, the highest since June 11, 2021.
Meanwhile, spot gold prices rose 1.5% to $1895.69 per ounce, and gold futures prices on the Comex in New York increased 1.3% to $1895.50.
According to Reuters, Russian rebel groups in eastern Ukraine allege that Ukrainian government forces carried out the attack by detonating mortar rounds. The accusations of the provocative act lead to the violation of the ceasefire agreement between the two warring regions.
"Ukrainian armed forces have grossly violated the ceasefire, under which the use of heavy weapons, according to the Minsk agreement, must be withdrawn," said a representative of the Luhansk region, quoted by the Interfax News Agency.
Russia is known to have deployed more than 100,000 troops to the Ukrainian border, and demanded a commitment by NATO (North Atlantic Treaty Organization) not to accept Ukraine as a member. The Russian demands automatically unsettled the Western bloc.
As supporters of Ukraine, the West in particular the US, threatened to impose sanctions on Moscow if they actually invaded Ukraine. The situation worsened after the RIA news agency reported that Russia had expelled the US representative, Bartle Gorman.
Gold Becomes Prima Donna Amid Uncertainty in the Russo-Ukrainian Conflict
In the past month, the development of the Russia-Ukraine conflict has come to the market's attention. The hotter the relationship between the two countries, the more safe haven assets will be hunted by investors. "When times are uncertain and anxiety is mounting, gold is still a safe haven asset worth buying," said Jim Wyckoff of Kitco Metals.
In addition, gold is also still a safe asset when inflation soars amid a potential war. "Not only have events at the Ukrainian border led investors to seek safe havens, but (gold) also offers protection against inflation at a time of soaring prices, plus the prospect that oil and gas prices will also rise if Russia strikes," wrote Craig Erlam. , senior market analyst at OANDA.
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