8 Apr 2022
Gold Tightens as Rising Dollar Offsets Ukraine-Russia Economic Repercussions
The Index Today
Gold turned tight on Friday while the dollar became strong, spurred by the possibility of additional interest rate hikes by the U.S. Federal Reserve. This has partly doused investor appetite for safe haven assets like gold in the wake of the Ukraine-Russia crisis.
According to Reuters, spot gold remained flat at $1,929.52 per ounce by 0520 GMT, with U.S. gold futures dipping by 0.3% at $1,931.90.
Jeffrey Halley, Senior Analyst at OANDA, said, "Gold has held up relatively well this week given the move higher by both U.S. yields and the U.S. dollar, we may be seeing some underlying haven and inflation hedging buying supporting the downside."
This week, the U.S. dollar soared to a two-year high against major currency peers, spurred by the hawkish stance adopted by the Fed as evidenced by the remarks of some of the central bank’s policymakers. Since gold moves inversely to dollar, a robust dollar could dampen the demand for safe haven assets.