Gold prices experienced a rollercoaster ride on Friday, as the market reacted to the invasion of Ukraine by Russia. Spot gold initially fell by 0.4% to $1,894.76 per ounce, following a surge to 18-month highs the day before. However, despite the dip, gold was still on track for a fourth consecutive weekly gain, reflecting continued uncertainty in the market.
Xaio Fu, from the Bank of China International, noted that the market was consolidating after the surprise surge in prices on Thursday. The ongoing risk premium and safe haven demand continued to support gold, although concerns about a potential rate hike by the U.S. Federal Reserve in March limited the upside for the precious metal.
Meanwhile, palladium prices were supported by supply concerns, with the metal rising by 0.6% to $2,415.68 per ounce. Investors feared potential disruptions in supply from Russia, a major palladium producer, leading to a third consecutive weekly rise for palladium.
Analysts like Ross Norman and Craig Erlam emphasized the unpredictable nature of the current market conditions, with gold and palladium prices remaining elevated due to ongoing uncertainty. Craig Erlam highlighted that if the West were to take stronger actions in response to the crisis in Ukraine, we could see further rallies in precious metal prices.
The market was also closely watching the movements of exchange-traded funds investing in gold and other precious metals, which have seen significant inflows this year. Spot silver and platinum prices experienced modest declines on Friday, but the overall sentiment remained cautious amidst geopolitical tensions and market volatility.
