Gold prices hit $1,900 per ounce on escalating tensions in Ukraine

Gold prices hit an eight month high yesterday, trading at just over US$1,900 per ounce, as investors fretted over escalating military tensions between Russia and Ukraine.

In particular, reports of mortar fire in Eastern Ukraine and an ‘imminent’ Russian invasion pushed investors into ‘safe haven’ gold. The gold price in Asia reached a high of $1,903 per ounce before pulling back.

A Reuters report yesterday revealed that top US diplomats were changing their travel plans to prepare for an invasion, while the US earlier stated that Russia had not pulled its troops away from the Ukraine border, and had actually added 7,000 more troops.

However, gold prices retreated slightly on hopes that President Joe Biden’s meeting with international leaders today will help pressurise both sides to de-escalate the ongoing tensions.

“Not only do the events on the Ukrainian border have investors seeking out safe-havens, but it (gold) also offers inflation protection at a time of surging prices and the prospect of higher oil and gas prices, if Russia does invade,” said senior market analyst at OANDA Craig Erlam.

The geopolitical uncertainty boosts the gold price at a time when a host of other commodities have made significant gains, including oil, copper, lithium and aluminium, as a global supply crunch takes hold.