Gold prices rose sharply on Thursday on safe-have appeal amid rising geopolitical tensions after reports indicated growing possibility of Russia invading Ukraine.
According to reports, Ukraine’s armed forces fired grenades and mortars on the territory of Luhansk People’s Republic in eastern Ukraine.
Reports say Ukranian forces fired at settlements of Sokolniki, Zolote-5, Veselenkoe and Nizhnee Lozovoe around 5:30 a.m. Moscow time.
The four territories are located in Luhansk Oblast in the Donbas region, an area recognized as a part of Ukraine but run by Russian backed separatists.
The attack violates the ceasefire regime in accordance with the Minsk agreement, which bans firing and using weapons in and near populated areas in Donbass.
Earlier in the day, the U.S. said that Russia has increased the number of troops near Ukraine’s borders, a claim rejected by Moscow.
This followed comments by NATO Secretary General Jens Stoltenberg that Russia was continuing to send troops to what is now the biggest concentration of forces in Europe since the cold war.
The dollar’s modest uptick slightly limited gold’s gains. The dollar index, which rose 96.11 in the Asian session, pared gains and was up just 0.10% at 95.80 about an hour past noon.
Gold futures for April ended higher by $30.50 or about 1.6% at $1,902.00 an ounce, the highest settlement since June 2021.
Silver futures for May ended up by $0.268 at $23.922 an ounce, while Copper futures for May settled at $4.5280 per pound, down $0.0130 from the previous close.
Data released by the Labor Department showed initial jobless claims rose to 248,000 in the week ended February 12th, an increase of 23,000 from the previous week’s revised level of 225,000. Economists had expected jobless claims to edge down to 219,000 from the 223,000 originally reported for the previous week.
The Commerce Department also released a report that showed housing starts tumbled by 4.1% an annual rate of 1.638 million in January after inching up by 0.3% to a revised rate of 1.708 million in December.
Meanwhile, the report said building permits climbed by 0.7% to an annual rate of 1.899 million in January after spiking by 9.8% to a revised rate of 1.885 million in December.
Building permits, an indicator of future housing demand, had been expected to plunge by 6.0 percent to a rate of 1.760 million from the 1.873 million originally reported for the previous month.
A separate report from the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area expanded at a slower rate in the month of February.
The Philly Fed said its diffusion index for current activity slid to 16.0 in February from 23.2 in January, although a positive reading still indicates growth in regional manufacturing activity. Economists had expected the index to dip to 20.0.
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