Gold Near 19-Month High as Ban on Russian Oil Drives Flight to Safety
Gold fell from near a 19-month high as risk sentiment improved, despite ongoing concerns that the fallout from Russia’s invasion of Ukraine will further fuel inflation and hurt economies.
European stocks and U.S. futures climbed on Wednesday, the day after the S&P 500 tumbled to a nine-month low on worries that energy prices may extend gains as the U.S. bans imports of Russian crude. Benchmark Treasury yields also rose as havens retreated, putting pressure on non-interest bearing gold.
Spot gold fell as much as 2.4% in London, moving back toward $2,000 an ounce.
Bullion is still up about 10% this year as investors seek a hedge against the threat of an inflationary shock to the global economy. Holdings in gold-backed exchange-traded funds have reached the highest since March 2021, with inflows of about 152 tons this year, according to initial data compiled by Bloomberg.
The impact of the war in Ukraine and sanctions on Russia have reverberated across the globe, driving commodities higher on supply woes. The latest move by the U.S. to ban Russian oil and the U.K. to phase out Russian crude imports by year-end has stoked further fears of stagflation, where prices rise while economic growth stutters.
