Gold Futures Settle Higher As Inflation Worries, War Jitters Fuel Safe-Haven Buying

Despite the dollar's solid uptick, gold prices moved to a five-week high on Monday, with concerns about rising inflation, escalating tensions in Ukraine and a surge in Covid-19 cases in China triggering some strong buying in the safe-haven metal.

The dollar index climbed to 100.86 amid expectations of policy tightening by the Federal Reserve. The index is currently hovering around 100.80, up nearly 0.5% from the previous close.

Gold futures for June ended higher by $11.50 or about 0.6% at $1,986.40 an ounce, after hitting a high of $2003.00 earlier in the day.

Silver futures for May ended up by $0.450 at $26.150 an ounce, while Copper futures for May settled at $4.8020 per pound, gaining $0.0785.

On the Russia-Ukraine front, Russian forces are reported to be re-organizing in eastern Ukraine for a decisive conflict. Ukraine, for the first time, revealed that it has lost 3,000 soldiers in seven weeks of the Russia Ukraine conflict.

According to reports, multiple explosions believed to be caused by missiles struck the western Ukrainian city of Lviv early today.

Covid cases are said to be on the rise in Shanghai. In Shanghai, most of the city's 25 million residents are still under a strict lockdown.

In economic news, official data showed China's economy slowed sharply in March, with major indicators released earlier today showing slower increases. Retail sales growth turned negative due to the COVID outbreak in many cities.

The data showed retail sales in China declined 3.5% in March from a year ago, marking the first drop since July 2020. Industrial production grew by 5% in March, compared with 7.5% in the first two months of the year. Unemployment in 31 major cities surged to 6% in March, a record high.

Rising inflation levels across the globe and elevated expectations of rate hikes by the Federal Reserve clouded the growth outlook for this year, with the Goldman Sachs' economics team saying that there is now a 35 percent chance of a U.S. recession over the next two years.

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