Gold climbs as Russia sanctions fuel fears over global economy

Gold climbs as Russia sanctions fuel fears over global economy

Stocks















Bloomberg

Gold advanced as sweeping sanctions on Russia for its invasion of Ukraine heightened fears of a hit to global economic growth.

Bullion surged as much as 2.2% after penalties were placed on the Bank of Russia to prevent it from using foreign reserves to blunt sanctions. They also excluded some Russian lenders from the SWIFT messaging system that underpins trillions of dollars’ worth of transactions.

Russian President Vladimir Putin retaliated with his own countermeasures, while Russia’s central bank raised its key interest rate to the highest in almost two decades and canceled trading altogether in stocks and bonds as the price of Russian-linked shares and debt tumbled overseas.

Concerns are growing about whether the financial chaos may damage global economic growth or require action by the US Federal Reserve to supply dollars. “Escalation of Russia-Ukraine conflict generates high demand for gold,” Daniel Briesemann, an analyst at Commerzbank AG said in a note.

Bullion climbed the most since May this month, outperforming other havens. It will also be getting a boost from lower expectations of aggressive monetary tightening by the Fed to tame the highest inflation in decades.

Meanwhile, the Russian