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Tension between Russia and Ukraine raises gold prices above $1,900

gold prices

Moscow, (Business News Report)|| Gold prices rose during Tuesday trading to more than $1,900 an ounce.

The rise in tensions between Russia and Ukraine supported the rise in gold prices.

On Monday evening, Russia officially recognized the Donetsk and Luhansk regions, which are under the control of pro-Moscow separatists, as “independent states” from Ukraine, amid widespread international rejection.

Gold is an asset that is used to hedge against spikes in inflation, geopolitical risks and times of economic crisis and war.

At 8:29 GMT, gold prices in futures contracts for April delivery increased by 0.43 percent, or $8.10, to trade at $1,907.9 an ounce.

On the other hand, gold prices fell in spot transactions by 0.11 percent, or $2.05, to record $1904.24 an ounce.

Meanwhile, the dollar index rose against six other major currencies by 0.07 percent at 96.0.

Separately, the one-month volatility of the euro jumped to a 15-month high, as the single currency was hurt by increased risk aversion amid rising gas prices and escalating tensions in Ukraine.

Russian President Vladimir Putin ordered troops into two breakaway regions in Ukraine, pushing the one-month euro volatility index to its highest level since November 2020 as the West vowed to impose sanctions in response to Russia’s moves.

The euro rose 0.2 percent against the dollar to $1.1331 by 09:10 GMT, after touching an eight-day low.

“The surge in European gas prices and the rise in concerns over Russian supplies to the region poses a risk to growth in Europe and therefore has the potential to significantly impact the timing of ECB (European Central Bank) policy tightening going forward, which is a EUR negative factor,” said Jane Foley, head of FX strategy, at Rabobank in London.

Meanwhile, the demand for safe haven currencies increased. The yen hit a three-week high and the Swiss franc remained near a one-month high against the dollar hit on Monday.

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