Gold was trading 0.41% up at $1,945.50
European shares gave up early gains to trade flat on Thursday, as the war in Ukraine marked a month and Western nations planned more sanctions on Russia.
European gas prices soared after Russian President Vladimir Putin said the country would seek payment in roubles for gas sold to “unfriendly” countries. Russian gas accounts for about 40% of Europe’s total consumption, and the move will likely exacerbate the region’s energy crunch and add to inflationary pressures.
“Economically speaking, Europe just entered a new and immediately at-risk phase in the Ukraine war,” said Clifford Bennett, chief economist at ACY Securities.
Nervousness was evident as investors scurried to sectors such as consumer stocks and utilities that are less impacted by economic crises.
The pan-European STOXX 600 index stayed at Wednesday’s levels when it fell 1% to end a five-session rally.
“Putin’s order may serve to lift energy prices, while also challenging central bank sanctions and impacting EU policy decisions,” said strategists at UBS’ Global Wealth Management team.
Worries over tougher sanctions on Russia heightened as U.S. President Joe Biden arrived in Brussels for meetings of the NATO alliance, G7 and European Union. Sanctions thus far have sent commodity prices soaring on supply shortage fears.
Europe’s oil and gas sector rose 0.6% to hit two-week highs. The index is up about 14% so far this year, surpassed only by the materials index.
Meanwhile, Russia stocks rose 7.7% as some trading resumed after a month-long hiatus. [RU/RUB]
Renault SA (OTC:RNLSY), the Western carmaker most exposed to the Russian market, fell 1% after it said it would suspend operations at its plant in Moscow.