Gold traded near its highest level in more than eight months as tensions around Ukraine intensified, boosting demand for the haven asset.
Separatist leaders in eastern Ukraine appealed to Russia for help fighting Ukrainian forces, the Kremlin said, a dramatic step that could be catalyst for Moscow to deploy troops there. The U.S. earlier expanded sanctions against Russia.
Bullion has got support from the growing crisis in Eastern Europe, with prices pushing higher despite expectations that the Federal Reserve will raise interest rates in March.
On Wednesday, President Joe Biden added new U.S. penalties, hitting the builder of the Nord Stream 2 gas pipeline and its corporate leadership. This is on top of a package announced a day earlier by the White House after Russian President Vladimir Putin moved to recognize breakaway territories in Ukraine as independent states.
The request for Moscow’s help from two breakaway regions comes as Putin sustains a large troop buildup on the Ukraine border. The U.S. estimates that around 150,000 soldiers are in the area, plus significant military equipment. Russia has repeatedly rejected claims that he intends to invade.
“The market has yet to see the kind of news that would galvanize the gold price to a new high,” said Nicholas Frappell, global general manager at Sydney-based ABC Bullion. “Putin’s recognition of the two breakaway regions has kept a bid under gold and the market is trading risk off with equities lower. If prices rise above $1,915, the emphasis is bullish, and expectations would tend toward the $1,935-$1,960 level.”
Spot gold rose 0.1% to $1,910.90 an ounce at 8:29 a.m. in Singapore, after climbing 0.6% Wednesday. Prices had touched $1,914.25 on Tuesday, the highest intra-day level since June 1. The Bloomberg Dollar Spot Index was little changed. Silver and platinum were steady, while palladium rose.