The ongoing rise in tensions between the West and Russia over Ukraine has supported gold, Reuters writes today. Russia could invade Ukraine within days or weeks, but could still take the diplomatic route, White House national security adviser Jake Sullivan said Sunday.
In addition, rising prices for precious metals are fueled by oil quotes, which tend to reach $100 per barrel.
Gold hit a more than a weekly high on Monday, as inflationary pressures from rising oil prices helped cushion the impact of rising US Treasury yields following an upbeat jobs report, while falling equities also boosted bullion appeal.
Spot gold rose 0.2% to $1,810.85 an ounce by 07:24 GMT after hitting its highest level since Jan. 27 at $1,814.91 early in the session. US gold futures rose 0.2% to $1,811.70.
“The biggest component of inflation right now, aside from supply chain issues, is oil prices. And that's a problem no matter how high you raise interest rates,” said Stephen Innes, managing partner at SPI Asset Management.
Oil prices rose again on Monday, with Brent reaching its highest since October 2014.
Gold bars are seen as a hedge against inflation and geopolitical risks, but higher rates would increase the opportunity cost of owning unprofitable gold assets.