(Bloomberg) — Gold surged on revived demand for safer assets as the US and China traded accusations, while a dramatic series of attacks clouded the prospects of peace between Russia and Ukraine.
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Bullion climbed more than 2% after Kyiv staged drone strikes across Russia on Sunday, hitting airfields as far away as eastern Siberia. Around the same time, Moscow launched one of its longest attacks against Kyiv, ahead of crucial peace talks this week.
Meanwhile, there are signs the truce in the US-China trade war is at risk after both sides accused the other of reneging on elements of their recent deal. President Donald Trump also stoked more worries by vowing to double import tariffs on foreign steel and aluminum to 50%, with Canada warning it would retaliate. A gauge of the greenback declined on Monday, making bullion more attractive for buyers in other currencies.
All of that is restoring some of gold’s haven appeal, which has ebbed somewhat since it hit a record high above $3,500 an ounce in April. The precious metal is still up more than a quarter so far this year though, with Goldman Sachs Group Inc. saying last week it would remain a hedge against inflation in long-term portfolios, along with oil.
Spot gold rose 2% to $3,353.69 an ounce as of 9:57 a.m. in London. The Bloomberg Dollar Spot Index fell 0.4%. Silver and palladium rose, while platinum edged lower.
Looking ahead, there are a slew of US labor-market indicators due this week — including the May employment report — which will help to steer the Federal Reserve’s monetary policy.
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