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Metals Stocks: Gold futures rise as Russia seizes Ukraine nuclear plant

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Gold futures traded higher Friday morning, headed for a sharp weekly gain, as anxieties grew after the latest Russian assault in Ukraine saw it take over the country’s largest nuclear power facility, following shelling that started a fire at the plant.

The attack on the nuclear plant is raising fears that Moscow’s invasion of Ukraine is taking a more perilous turn in Eastern Europe.

April gold
GCJ22,
+0.83%

GC00,
+0.83%

was trading $13.40 higher, or 0.7%, at $1,949.30 an ounce, after a 0.7% advance on Thursday. The precious metal was looking at a weekly rise of 3.3% thus far, which would mark its largest weekly rise since May 7, 2021.

“Gold has been one of the few beneficiaries of the dreadful scenes in Ukraine with investors rushing to safe havens at a time of crisis,” wrote Rupert Rowling, market analyst at Kinesis Money, in a daily note.

Meanwhile, May silver 
SIK22,
+0.53%

SI00,
+0.53%

was trading 14 cents, or 0.5%, higher at $25.34 an ounce, after a 0.9% gain a day ago. The silver contract was on pace for a 5.5% weekly advance which would mark its best such gain in six weeks.

Apart from the geopolitical tensions, commodity investors are awaiting a monthly report on U.S. employment from the Labor Department due later Friday.

Expectations are for a gain in jobs of 440,000 in February and for the unemployment rate to fall to 3.9%, with hourly wages hitting a year-over-year rise of 5.8%, based on consensus estimates of economists surveyed by The Wall Street Journal.

The jobs data will be the last before the Federal Reserve holds its next policy meeting, March 15-16. Federal Reserve Chairman Jerome Powell said in congressional testimony this week that he would propose an increase of 25 basis points to benchmark Fed fund rates to combat rising inflation.

Rowling said that the Fed’s likely move to raise interest rates is capping potential further gains in bullion and other precious metals which do not offer a yield.

“While the Fed will have to tread ‘carefully’ given the situation in Ukraine, this confirmation of interest rate hikes is putting a ceiling on gold, with its lack of yield making it less attractive in a climate of rising interest rates,” the Kinesis analyst wrote.

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