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Metals Stocks: Gold settles higher for the session, month and quarter

Gold futures finished higher Thursday, tallying gains for the month as well as the quarter as the Russia-Ukraine war continued to boost haven demand for the precious metal.

Gold rose amid some safe-haven demand, due in part to the Ukraine-Russia war, weakness in the U.S. dollar, and likely “end-of-the-quarter interest, “Jeff Wright, chief investment officer at Wolfpack Capital, told MarketWatch. The ICE U.S. Dollar Index
DXY,
+0.52%

trades about 0.5% lower for the week.

Read: War in Ukraine: Heavy fighting rages near Kyiv as Russia appears to regroup

Gold for June delivery
GC00,
+0.48%

GCM22,
+0.48%

rose $15, or 0.8%, to settle at $1,954 an ounce on Comex. May silver
SIK22,
-0.19%

added 2 cents, or nearly 0.1%, at $25.133 an ounce.

Gold, based on the most-actively traded futures contract, posted a a 2.8% monthly rise and a 6.9% gain for the quarter, according to Dow Jones Market Data, while silver was up nearly 3.2% and 7.6% for those periods, respectively.

Stephen Innes, managing partner at SPI Asset Management, told MarketWatch Thursday that he’s raised his year-end target on gold to $1,850 from $1,650 as “the lingering Ukraine war effect will fuse with concerns about growth and inflation” and could lead to broad-based reallocation to the precious metal.

Even so, he believes the “market’s stagflation concerns are likely misplaced — meaning prices will eventually come under pressure as the [Federal Reserve] raises interest rates but, more importantly, real rates rise.”

Given that, it will be a “tall task for gold to breach recent highs,” said Innes. Gold futures settled at a 19-month high of $2,043.30 on March 8.

On Thursday, prices for gold had traded as low as $1,923, with at least some of that weakness blamed on a sharp decline in oil.

The drop in crude oil prices “has somewhat allayed the inflation concerns of market participants,” likely diminishing demand for gold as a store of value, wrote analysts at Commerzbank, in a note.

The U.S. oil benchmark
CL.1,
-6.33%

CL00,
-6.33%

fell sharply after news reports said President Joe Biden was preparing to order the release of up to 1 million barrels of oil a day from the reserve.

Gold prices initially fell, then moved up after data Thursday showed that U.S. consumer spending rose by a mild 0.2% in February. Rising prices due to high inflation played a big role and is weighing on the U.S. economy.

“Gold will remain headline driven and seems poised to make another run higher as the latest Russian move on gas contracts suggests a breakthrough in peace talks seems very far away,” said Edward Moya, senior market analyst at OANDA, in a market update.

Russia issued a decree Thursday, demanding payment for natural gas in rubles, but left a loophole to allow dollar and euro payments through a designated bank.

Among other metals traded on Comex, May copper
HGK22,
-0.29%

ended little changed at $4.751 a pound. It was up 6.7% for the month and up 6.4% for the quarter.

July platinum
PLN22,
-0.79%

shed 0.5% to $995.80 an ounce, ending 4.1% lower for the month but up 3.1% for the quarter. June palladium
PAM22,
+0.78%

settled at $2,255.60 an ounce, up 0.6% for the session, with prices posting a monthly loss of 9.9%, but quarterly gain of 18%.

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