GOLD PRICES surged before reversing their gains on Thursday as Russia’s invasion of Ukraine triggered sharp movements across world financial markets.
Spot gold reached US$1,973.96 per ounce during the session before retreating to approximately US$1,902.86, down 0.3% at the reporting point, according to Reuters.
The initial move reflected a rush towards defensive assets as investors assessed the outbreak of war. However, sentiment shifted later in the day after US President Joe Biden outlined new sanctions against Russia.
The measures targeted Russian banks and technology imports but did not include oil and gas or exclude Russia from the SWIFT international payments system at that stage.
World shares recovered some of their earlier losses, while the US Dollar and oil prices pulled back from their session highs. US Treasury yields also reversed much of their initial decline.
Gold’s sharp reversal highlights the uncertainty surrounding the conflict and the market’s response to rapidly changing developments.
The session also demonstrates that an initial rise in safe-haven demand does not guarantee sustained price gains, particularly when investors reassess the economic implications of sanctions.
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