Gold rose more than 1 percent for the first time in four days on Wednesday as the dollar retreated and geopolitical tensions over Ukraine boosted demand for the precious metal.
Palladium was the flagship of price increases among precious metals, rising as much as 7 percent. City Research said in a note that a gradual revival of global car production could boost demand for the metal this year. The last ounce of palladium rose 5.7 percent to $ 20.20 in 2006.
Gold for immediate delivery rose 1.5 percent to $ 1,840.91 an ounce. In the US futures market, gold rose $ 30.80 an ounce, or 1.7 percent, to close at $ 1,843.20.
The weakening dollar made gold cheaper for non-US buyers, and at the same time, pulling back 10-year US Treasury yields from a two-year high boosted demand for the precious metal.
Edward Moya, senior analyst at OANDA, said the drop in bond yields helped break up the higher price of gold, but overall gold may continue to trade in the $ 1,800- $ 1,840 range until next week’s Fed meeting.
Expectations that the US Federal Reserve will start strengthening its monetary policy in March have put the price of gold under downward pressure this year as rising interest rates raise the cost of holding the precious metal.
According to Moya, gold may support geopolitical tensions in Ukraine and the Middle East.
Russia may launch a new offensive against Ukraine in the near future, but Washington will pursue diplomacy as long as it can, US Secretary of State Anthony Blinken said on Wednesday.
Gold has also benefited from rising oil prices, which have raised concerns about escalating inflationary pressures and strengthened the precious metal’s position as a safe haven against inflation.
In other precious metals, platinum for immediate delivery rose 4.4 percent to $ 1,024.50 an ounce. Silver for immediate delivery rose 2.7 percent to $ 24.8 an ounce.