Gold prices continued their ascent on Tuesday, reaching a one-week peak as escalating tensions between Russia and Ukraine spurred a surge in demand for safe-haven assets. Investors are closely monitoring key signals from the Federal Reserve regarding its interest rate strategy.
Spot gold increased by 0.6% to $2,626.53 per ounce by 1511 GMT, marking its highest point since November 11. Meanwhile, US gold futures also rose 0.6% to $2,630.00 per ounce. On Monday, gold experienced a 2% jump, its largest single-day gain since mid-August, rebounding significantly from a two-month low observed last week.
"We believe that the recent reports about Russia altering its nuclear doctrine in response to Ukraine's first long-range missile strike on Russian soil have triggered a flow of safe-haven investments into gold," explained Daniel Ghali, a commodity strategist at TD Securities. "Without another price consolidation, speculative investors currently lack sufficient capital to sustain gold's upward trend."
Gold's appeal is reinforced by geopolitical conflicts, economic uncertainties, and a low-interest rate climate. This week, several Federal Reserve officials are scheduled to speak, potentially providing additional clarity on the path of interest rate adjustments. Traders currently estimate a 62% likelihood of a 25-basis-point cut in December.
"Given that the factors supporting gold have not weakened, the lower price point is evidently attracting buying interest," noted analysts from Commerzbank. Geopolitical instability, central bank purchases, and growing deficits in the United States and other Western nations are further bolstering gold's value.
Additionally, the recent pullback of the dollar, following a robust rally last week to a one-year high driven by Trump trade euphoria, is making gold more attractive to buyers using other currencies. Among other metals, spot silver rose 0.1% to $31.14, reaching a one-week high earlier in the session. Platinum increased by 0.4% to $971.55, while palladium surged 2.2% to $1,027.00, hitting a near two-week high after a more than 5% rise on Monday.
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