![[Kenya] Digital credit provider Tala disbursed Sh240 billion in loans in eight years](https://theafricanbusiness.com/wp-content/uploads/2023/02/TALA-APP-360x180.jpg "[Kenya] Digital credit provider Tala disbursed Sh240 billion in loans in eight years 17")
Gold price hits 5-week high as war, inflation continue to boost safe havens
The gold price climbed to a five-week high on Monday as the war in Europe, elevated inflation and the risk of a US recession further bolstered demand for the safe haven asset.
Spot gold advanced 0.7% to $1,988.15 per ounce by noon ET, closing in on the $2,000 level last seen in early March. US gold futures rose 0.8% to trade at $1,991.00 per ounce in New York.
After capping a second weekly gain, bullion climbed as much as 1% earlier in the day following price increases in both oil and natural gas.
The possibility of a de facto European Union embargo on Russian gas and the threat of some curbs on crude in Europe’s next sanctions package have lifted both commodities, adding to the already elevated raw material prices around the globe. This in turn has driven up demand for gold as a hedge against accelerating inflation.
“The little step-up in tension due the Russia-Ukraine war with inflationary pressures across the board boosts safe-haven demand for gold,” David Meger, director of metals trading at High Ridge Futures, told Reuters.
Concerns over the economic hit from covid-led restrictions in China also supported gold prices, Meger added.
Gold’s advance came despite a jump in benchmark 10-year US Treasury yields to the highest since December 2018 and a stronger dollar, both of which usually dull the appetite for gold among overseas buyers.
“Gold is being reinforced by elevated inflation and heightened geopolitical risk,” said Kelvin Wong, an analyst at CMC Markets in Singapore, in a Bloomberg note.
Prices rising above the key medium-term technical resistance level of $1,975 is “likely to have attracted momentum-based traders back into the bullish camp,” Wong said.
