Gold above $2,000 on safe-haven appeal; nickel up over 20%

Gold at highest since Aug. 2020 on Russia-Ukraine war; Oil rises to 2008 highs as U.S., Europe mull Russian import

Gold climbed to its highest in one-and-half years on March 7 and palladium hit an all-time high on safe-haven asset appeal, while nickel soared over 20% on fears of supply disruptions tied to sanctions on Russia and continued fighting in Ukraine.

Gold prices rose above $2,000 per ounce, palladium hit a record, LME 3-month nickel posted its largest ever one-day gain, and oil and wheat jumped to 14-year highs as Russia’s escalating invasion of Ukraine continued to roil global commodities.

The searing rally in raw material prices has sparked concerns over economic growth in countries still recovering from the COVID-19 pandemic.

“The saying goes that the best cure for high prices is high prices,” said OANDA senior analyst Jeffrey Halley in a report.

“Unfortunately, in a stagflationary environment, that doesn’t hold true. I suspect growth projections for 2022 around the world will need to be sharply revised lower, and it will be interesting to see what the central banks of the world will do.”

Stagflation refers to countries that are experiencing a simultaneous increase in inflation and stalled economic output.

Spot gold was up 1% at $1,986.29 per ounce, as of 0520 GMT, after scaling to its highest since Aug. 19, 2020 at $2,000.69 earlier in the session.