Gold prices continue to recover, supported by escalating Russia-Ukraine tensions and a weaker dollar
Gold prices climbed on Tuesday, continuing their rebound from two-month lows, as the dollar retreated from recent highs and escalating Russia-Ukraine tensions boosted safe-haven demand.
Spot gold rose 0.8% to $2,633.8 an ounce, while December gold futures gained 0.9% to $2,637.45 an ounce.
This followed a nearly 2% surge on Monday, marking a strong recovery from recent lows.
Geopolitical Risks Drive Safe-Haven Appeal
Heightened tensions between Russia and Ukraine have bolstered gold’s appeal as a safe haven. Over the weekend, reports emerged that the U.S. had authorized Ukraine to use long-range missiles against deeper Russian targets.
Russia issued warnings of severe consequences if such attacks occur, while continuing missile strikes on Ukrainian territories. Analysts suggest that the potential for escalation in the conflict has spurred demand for gold as investors seek safety amid geopolitical uncertainty.
Weaker Dollar and Yields Support Gold
Gold also benefited from a pullback in the dollar and Treasury yields. The dollar, which hit a one-year high last week, eased over the past two sessions, while the 10-year Treasury yield retreated from a five-month peak.
This weakness came despite strong inflation data and slightly less dovish signals from the Federal Reserve. Traders still anticipate a possible interest rate cut in December, with CME FedWatch showing a 55.7% probability of a 25-basis-point reduction and a 44.3% chance of rates remaining unchanged.
Mixed Moves in Precious and Industrial Metals
– Platinum futures dipped 0.5% to $969.55 an ounce.
– Silver futures rose 0.7% to $31.427 an ounce.
In industrial metals, copper saw limited recovery from recent losses tied to concerns over slowing demand in China, the world’s largest importer. Benchmark copper futures on the London Metal Exchange declined 0.6% to $9,041 a ton, while December copper futures dropped 0.6% to $4.0965 a pound.
The market now awaits the People’s Bank of China’s decision on its benchmark loan prime rate, due Wednesday, for further indications of demand trends in the region.
