On Tuesday (Feb. 28), gold futures closed higher, with investors rushing to buy gold as a hedge against inflation. This followed reports that inflation numbers in European countries had risen.
Gold futures rose $11.80, or 0.65%, to close at $1,836.70/ounce. Silver futures also rose, up 27.80 cents, or 1.34%, to close at $21.071/ounce. Platinum futures rose $13.60, or 1.44%, to close at $955.50/ounce. Meanwhile, palladium futures were down $7, or 0.5%, at $1,420.90/ounce.
According to reports, inflation in France rose to 7.2% in February from 7.0% in January, while Spain’s inflation rose to 6.1% in January, higher than the previous month’s level of 5.9%.
Commenting on the situation, Nitesh Shah, an analyst at WisdomTree, stated that investors were buying gold as a hedge against inflation and economic volatility, and that gold prices could soar above $2,100/ounce by the end of 2023 without difficulty.
The World Gold Council (WGC) also reported that central banks around the world bought 1,136 tonnes of gold as reserves in 2022, worth $70 billion. This is the highest value since 1967.
Krishna Gopal, an analyst at WGC, stated that banks around the world were turning to gold reserves, believing that gold would remain valuable in difficult situations. Gold also allows central banks to diversify their exposure beyond other assets, such as US government bonds and the dollar.
However, it is worth noting that throughout the month of February, gold futures fell 5.6%, marking the biggest monthly drop since June 2021.
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