Gold prices continue to rise amid fears of widening conflict between Russia, Ukraine
Date
11/20/2024 3:20:11 AM
(MENAFN) Gold prices continued their strong upward momentum for the third consecutive day, starting Wednesday's trading session with notable gains. Escalating fears of a broader conflict between Russia and Ukraine have driven demand for the precious metal, easing its dependence on the strong US dollar. The dollar had recently surged to a two-year high following Donald Trump’s return to the US presidency, an event that significantly influenced market sentiment and gold price expectations.
Following the US election results, gold prices initially suffered heavy losses, shedding over USD200 per ounce as Trump’s re-election boosted the dollar for seven consecutive sessions. However, spot gold rebounded, rising USD5, or 0.2 percent, to USD2,636.97 an ounce by 4:30 a.m. GMT. Gold futures for December delivery also climbed by USD10, or 0.4 percent, to USD2,640 per ounce, marking the highest levels since mid-November. By the end of Tuesday’s trading, spot gold prices had gained 0.75 percent to USD2,631.78 per ounce, while futures contracts rose 0.9 percent to USD2,638.70 per ounce.
The precious metal has bounced back sharply after hitting its lowest levels in over two months earlier this week, surging about 2.5 percent as tensions in the Russia-Ukraine conflict heightened. This increased demand for gold as a safe-haven asset, pushing prices to their highest levels in over a week. Investors are also closely monitoring the outlook for US interest rates, which could further influence the trajectory of gold prices in the coming days.
The demand for safe-haven assets strengthened further after Russia updated its nuclear doctrine, signaling a more aggressive stance. Russian President Vladimir Putin eased conditions for launching nuclear strikes in response to conventional attacks, escalating geopolitical risks. Meanwhile, the US dollar's rally slowed after reaching a near two-year high last week, making gold more affordable for buyers using other currencies and boosting global bullion demand.
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