(Bloomberg) -- Gold held a gain as traders weighed the impact of sanctions against Russia with Moscow’s countermeasures in the wake of the invasion of Ukraine, which has boosted demand for haven assets.
Bullion capped its biggest monthly advance since May as the raft of penalties against Russia raised concerns over the impact on global growth and inflation. Disruptions to supplies of grain, energy and metals are adding to price pressures, at a time the Federal Reserve is preparing to raise interest rates.
Russia’s markets remain under huge pressure after the U.S. and its allies moved to block the central bank’s access to its foreign reserves and cut some lenders off from the SWIFT messaging system for global banking. President Vladimir Putin unveiled his own countermeasures by banning residents from transferring hard currency abroad.
“Gold is somewhat stuck at the $1,900 level and that might persist until global growth concerns intensify,” said Edward Moya, senior market analyst at Oanda Corp. “Gold will get its groove back once inflationary pressures threaten growth prospects. Stagflation will be the key word that gets tossed around and that should ultimately trigger safe-haven flows toward gold.”
Spot gold was steady at $1,907.76 an ounce at 8:13 a.m. Singapore time after rising 1% Monday and 6.2% during February. Palladium was slightly higher after climbing as much as 7.8% on Monday on concerns over potential supply disruptions. Russia produces about 40% of the palladium mined globally. Silver gained, while platinum was little changed.
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