Gold rises amid strengthening of geopolitical risks

Gold rose by 1% on February 28 morning to gain a foothold above $1,900 an ounce, as rising geopolitical instability and sanctions against Russia supported traders' risk aversion, Report informs referring to the auction data.

The price of April gold futures on the New York Comex exchange rose $22.85, or 1.21%, to $1,910.45 a troy ounce. March silver futures rose 1.72% to $24.41 an ounce.

Traditionally more reliable gold received support due to increased geopolitical risks associated with the situation around Ukraine.

Thus, a number of countries have introduced restrictive measures against Russia after Moscow launched a military operation to demilitarize Ukraine in connection with the situation in Donbas. At the same time, the German government earlier said that the US, Canada, the UK and EU countries intend to disconnect a number of Russian banks from SWIFT.

The appreciation of the dollar, which also acts as a more reliable asset, somewhat restrains the growth in the value of the precious metal. The dollar index (the exchange rate against a basket of currencies of six countries - the main trading partners of the US) is growing by 0.8%, to 97.38 points. Given an expensive dollar, gold becomes less profitable for investors who own other currencies.