Gold prices up more than 1% as Ukraine-Russia conflict escalates

The gold rose more than 1% on Thursday, as Russian news reports of mortar attacks in eastern Ukraine prompted investors to seek safe-haven assets, while dovish signals from US Federal Reserve minutes they also backed bullion.

At 0942 GMT, spot gold was up 1.2% at $1,890.95 an ounce, after hitting its highest level since June 11 at $1,892.91. US gold futures were also up more than 1.2% at $1,893.60.

“Gold benefited from renewed tensions in Eastern Europe. Palladium is likely to move in a similar fashion, but the moves are fueled by supply concerns, while gold benefits from its safe-haven status.”, said Giovanni Staunovo, an analyst at UBS.

Russian-backed rebels have accused Ukrainian forces of launching artillery attacks on their territory in violation of agreements aimed at ending the conflict in the disputed area of ​​Donbas.

The West has threatened Russia, one of the top palladium producers, with new sanctions if it attacks Ukraine.

“Gold traders need to worry about the details as it all depends on whether or not Russia attacks”, said Matt Simpson, senior market analyst at City Index.

If Russia invades, gold is likely to gain, but to see a sharp reversal that sends gold noticeably lower, you would probably need to see Russian troops pouring out of the border, Simpson added.

The minutes of the latest monetary policy meeting on Wednesday pointed to a less aggressive Fed than feared, which also supported gold.

Among other precious metals, silver gained 1% to $23.78 an ounce, platinum added 1.7% to $1,079.28 an ounce, a three-month high, while palladium added 2.3 % to $2,332.30.

With information from Reuters