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Gold Firms as Investors Gauge Impact of Ukraine Crisis

  • Massive inflows into ETFs
  • Gold could hit $2,000 if things deteriorate - UBS analysts
  • Palladium set to gain over 4% for the week

Feb 25 (Reuters) - Gold rose on Friday, stabilising as investors turned cautious after the previous day's big swings in reaction to Russia's invasion of Ukraine, and sanctions imposed on Moscow by the West.

Missiles pounded the Ukrainian capital on Friday as Russian forces pressed their advances on several fronts, in an invasion that has been pegged as the biggest attack on a European state since World War Two.

Palladium resumed its rally, with traders on guard for signs of any potential supply shortfall from Russia.

Spot gold gained 0.5% to $1,912.31 per ounce as of 0814 GMT, after hitting its highest since September 2020 at $1,973.96 on Thursday. It was set for a fourth straight weekly gain. U.S. gold futures , however, shed 0.6% to $1,915.00.

"There's a risk-off tone which is seeing gold bid again," said Matt Simpson, senior market analyst at City Index, while noting investors were not rushing back into the market after the volatility seen on Thursday, and price swings were far smaller.

"February has proved to be the perfect storm for gold - with inflation, falling stock markets and geopolitical uncertainty boosting its safe-haven appeal," said David Jones, chief market strategist at

Exchange-traded funds that invest in gold and other precious metals have seen massive inflows this year. 

UBS analysts said gold could hit $2,000 "if things deteriorate," but prices will be pressured by a rebound in U.S. real rates and risk sentiment if not.

Palladium gained 2.1% to $2,452.09, and was on course for a third weekly rise. The market touched $2,711.18 on Thursday, its highest since July last year.

"With platinum (and palladium) being a key export for Russia, we simply rushed to those exits, covering shorts. Today, platinum and palladium are simply following gold," Simpson said.

Russia's Nornickel is a major producer of both metals, which are used in catalytic converters to clean car exhaust fumes. 

Spot silver rose 0.1% to $24.23 per ounce, platinum was up 0.2% to $1,058.74.

Reporting by Asha Sistla and Bharat Govind Gautam in Bengaluru; Editing by Rashmi Aich and Uttaresh.V & Simon Cameron-Moore

Source: Reuters

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