Gold Set for Biggest Weekly Gain Since 2020 as War Boosts Havens

(Bloomberg) — Gold headed for its biggest weekly gain since July 2020 as the war in Ukraine fueled demand for haven assets.

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Investors are assessing the economic fallout from Russia’s invasion of its neighbor, which is disrupting flows of energy, grains and metals. The resulting surge in oil prices has stoked concerns about global growth and inflation risks.

Investors have sought out bullion amid the uncertainty, with holdings in exchange-traded funds backed by the metal climbing to the highest since March and hedge fund managers boosting their net bullish gold bets to a 19-month high. Gold prices extended gains Friday after a U.S. payrolls report showed wage growth slowed even as hiring boomed last month. The figures may offer some respite from strong inflationary pressures as the Federal Reserve gets set to raise interest rates.

The metal “is in a sweet spot for the time being as traders certainly want to have exposure to gold given the war situation in Ukraine,” said Naeem Aslam, chief market analyst at Ava Trade. Still, the jobs data “has confirmed that the Fed has the green light to increase the interest rate and this is likely to keep the gold price on a tight leash.”

Spot gold rose 1.7% to $1,968.56 an ounce at 4:44 p.m. in New York. A close at that price would mark a 4.2% weekly gain, the biggest since July 2020. Bullion for April delivery increased 1.6% to settle at $1,966.60 on the Comex. Spot palladium advanced 8%, topping $3,000 for the first time since May, on concerns over potential supply disruptions. The metal is up 27% this week. Russia produces about 40% of the metal mined globally. Silver and platinum also surged.