Gold hover near a 19-month high following a ban on Russian oil import by U.S.. Rising inflation conerns eroding value of other assets as well boosted price of the bullion.
The bullion gained 12% in 2022 and is closing in ona record as investors flock aways from vlaue eroding assets due to inflation. Holdings in gold-backed exchange-traded funds have climbed to the highest since March 2021, with inflows of about 152 tons this year, according to initial data compiled by Bloomberg.
“The ban on Russian oil by the U.S. is causing more inflation jitters,” said Howie Lee, an economist at Oversea-Chinese Banking Corp, as reported by Bloomberg.
“We all saw that coming, but still, it feels like a roller coaster drop moment. With this ban, oil is easily expected to trade at new records. By that correlation, it is not difficult to see why gold may also be trading at a new record high soon.”
Nominal gold prices should breach $2,125 over the next three months and trade in a higher range for the rest of 2022 as “financial markets grapple with surging headline inflation, geopolitical uncertainty, and recession tail risks,” Citigroup Inc. analysts including Aakash Doshi, said in a report dated March 8.