Gold trapped between Ukrainian tensions and dollar's strength
Gold prices rose in European trade after a short hiatus from gains, amid active haven demand due to rising Ukrainian tensions and prospects of new western sanctions on Russia.
Another crisis is emerging worldwide, and it's the resurgent coronavirus crisis in China, which forced the closure of several major cities, including Shanghai.
Gold prices rose over 0.4% to $1,933 an ounce, after closing down 0.6% on Friday, the first loss in three days following strong US labor data.
Gold prices lost 1.7% last week, the second weekly decline in a row as haven demand declined and dollar strengthened.
New Sanctions
Germany said the west will agree on imposing new sanctions on Russia soon, after Ukraine accused Russia of committing war crimes.
Germany and Italy announced readiness to discuss banks on Russian gas supplies, the first such indication of a move against this vital resource.
Ukraine accused Russian forces of committing a "massacre" in the Ukrainian city of Botcha, which was denied by the Russian defense ministry.
US Dollar
US dollar rose over 0.2% on Monday for the third straight session against a basket of major rivals, pressuring gold and other dollar-denominated commodities.
Renewed demand on dollar comes as concerns rise again over geopolitical tensions in Ukraine, while US 10-year treasury yields rose following strong US labor data.
A Crisis in China
Chinese authorities reported 13,146 Covid 19 infections on Sunday, the highest in the latest wave, which already hit over 100,000 people in China.
The SPDR
Gold holdings at the SPDR Gold Trust rose 0.29 metric tones to a total of 1,091 tones on Friday.
Forecasts
Analysts expect the ongoing crisis in Ukraine to continue bolstering gold prices, however higher US treasury yields will put a cap on gains.
That's way gold prices continue to move in such sideways trading until the picture clears up about the new western sanctions on Russia and the spread of the new Covid 19 wave in China.
