Gold Settles Near 2,000 USD

Gold advanced 1% on Thursday, jumping back above the psychological 2,000 USD as the war in Ukraine and inflation concerns support the bullion.

Danske Bank said in a note that it does not expect the Russia-Ukraine conflict to spread to other countries and sees commodity prices broadly moderating over the next six months. 

"We expect the Ukrainian and Russian leaders to agree on a truce eventually. However, we also believe that the Ukrainian government will be forced to painful concessions in the absence of direct military intervention by the West/NATO," it said.

Later today, the US CPI inflation for February is due, seen rising further to 7.9% yearly, while the core inflation is expected to accelerate to 6.4%. As a result, the Fed will be forced to raise rates faster as inflation rises, potentially moving beyond 10% on soaring commodities.

The short-term support could be seen at yesterday/today's lows near 1,975 USD. As long as the metal trades above that, the outlook seems bullish, likely targeting the current cycle highs at 2,060 USD.

However, if markets receive more optimistic news from the diplomatic talks between Russia and Ukraine, profit-taking could bring gold back toward 1,900 USD.