SINGAPORE (Reuters) Gold climbed to its highest in one-and-half years on Monday, and palladium hit an all-time high on safe-haven asset appeal. At the same time, nickel soared over 20% on fears of supply disruptions tied to sanctions on Russia and continued fighting in Ukraine.
Gold prices rose above $2,000 per ounce; palladium hit a record, LME 3-month nickel posted its most significant ever one-day gain, and oil and wheat jumped to 14-year highs as Russia's escalating invasion of Ukraine continued to roil global commodities.
The searing rally in raw material prices has sparked concerns over economic growth in countries recovering from the COVID-19 pandemic.
"The saying goes that the best cure for high prices is high prices," said OANDA senior analyst Jeffrey Halley in a report.
"Unfortunately, in a stagflationary environment, that doesn't hold true. I suspect growth projections for 2022 around the world will need to be sharply revised lower, and it will be interesting to see what the central banks of the world will do."
Stagflation refers to countries experiencing a simultaneous increase in inflation and stalled economic output.
Gold prices top $2,000 an ounce on Russia-Ukraine war jitters, increasing investor buying.
Spot gold was up 1% at $1,986.29 per ounce, as of 0520 GMT, after scaling to its highest since Aug. 19, 2020, at $2,000.69 earlier in the session.
Fighting stopped about 200,000 people from evacuating the besieged Ukrainian city of Mariupol for the second day in a row on Sunday, as Russian President Vladimir Putin vowed to press ahead with his invasion unless Kyiv surrendered.
Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Trust (P: GLD), rose 0.4% to 1,054.3 tonnes on Friday - their highest since mid-March 2021.
Global commodities markets extend rallies.
Palladium was up 5.6% at $3,170.49 per ounce after hitting an all-time high of $3,172.22 earlier in the session.
Russia accounts for 40% of global metal production used by automakers in catalytic converters to curb emissions.
Industrial metals also rose, led by solid gains in nickel which surged more than 20% as global supply chains tried to price in the possible absence of supplies from Russia, the third-largest nickel producer.
Chinese ferrous futures also gained ground, with iron ore hitting a six-month high after a downbeat economic forecast over the weekend lifted expectations for more infrastructure spending in the world's second-largest economy.
Oil prices soared more than 6%, touching their highest since 2008 as the United States and European allies mull a Russian oil import ban, and delays in the potential return of Iranian crude to global markets fuelled supply fears.
Brent crude rose $8.46, or 7.2%, to $126.57 a barrel by 0128 GMT, while U.S. West Texas Intermediate (WTI) crude rose $7.65, or 6.6%, to $123.33.
Chicago wheat futures rose more than 5%, hitting a 14-year top as traders continued to assess the impact of potential off-limits supplies from Russia, the world's biggest wheat exporter, and curtailed output and shipments from Ukraine.
With Ukrainian ports closed and operators reluctant to trade Russian wheat in Western financial sanctions, buyers are trying to find alternative suppliers.