Gold hits 1-week high as Russia-Ukraine tensions boost rush to safety

Silver at 1-week peak, palladium at a near 2-week high

By Reuters

Published: Tue 19 Nov 2024, 8:13 PM

Gold prices climbed for a second consecutive session on Tuesday, hitting a one-week high as mounting Russia-Ukraine tensions sparked a rush for safe-haven assets, while investors awaited key signals on the Federal Reserve’s interest rate plans.

Spot gold rose 0.6 per cent to $2,626.53 per ounce by 1511 GMT, hitting its highest level since November 11. US gold futures gained 0.6 per cent to $2,630.00 per ounce.

On Monday, gold jumped 2 per cent, marking its biggest one-day rise since mid-August and rebounding sharply from a two-month low hit last week.

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“We think that the overnight reports on Russia changing its nuclear doctrine following Ukraine’s first long-range missile strike on Russian territory has led to some safe haven flows in gold,” said Daniel Ghali, commodity strategist at TD Securities.

“Barring another consolidation in prices, speculative investors just don’t have enough dry powder in their war chest for gold to resume its upward trajectory at this juncture.”

Gold’s allure is bolstered by geopolitical tensions, economic risks and a low-interest rate environment.

Multiple Fed officials are scheduled to speak this week, which could offer further insights into the rate cut paths.

Traders currently see a 62 per cent chance of a 25-basis-point cut in December.

“Since the arguments in favour of gold have not diminished, the lower price level is apparently leading to buying interest,” Commerzbank analysts noted.

Geopolitical uncertainty, central bank buying, and swelling deficits in the United Staes and other western nations are further supporting gold, the bank said.

Also supporting bullion was the dollar’s pullback that comes after a strong rally last week to a one-year high fueled by the Trump trade euphoria. A weaker dollar makes gold more appealing to buyers in other currencies.

Among other metals, spot silver added 0.1 per cent to $31.14, hitting a one-week high earlier in the session. Platinum ticked 0.4 per cent higher to $971.55.

Palladium rose 2.2 per cent to $1,027.00, hitting a near two-week high after rising more than 5 per cent on Monday.