Gold Gains as Investors Seek Haven From Ukraine War Tensions
Gold rose for a second day, with the market focused on rising geopolitical risks from an escalation of Russia’s war with Ukraine.
Bullion gained by as much as 1.1% on Tuesday as Ukraine carried out its first strike with American missiles in Russia and President Vladimir Putin approved an updated nuclear doctrine expanding the conditions for using atomic weapons. US officials indicated they won’t respond to the Russian decision. Investors typically seek safety in the precious metal amidst geopolitical and economic uncertainty.
The metal’s strength also come as the greenback took a breather after a rally that was boosted by Donald Trump’s election victory as well as signs that the US central bank may have to slow the pace of rate cuts.
Still, gold’s near-term outlook looks negative as macro funds’ bullish wagers are unlikely to rise back towards extreme levels against a “significantly different” propsect for the Fed’s rate-cutting cycle, according to TD Securities senior commodity strategist Daniel Ghali.
Investors will also be parsing comments by Fed policymakers ahead of next month’s rate decision meeting, with several officials due to speak this week. Lower rates typically support bullion.
Spot gold rose 0.5% to $2,625.79 an ounce as of 10:22 a.m. in New York. The Bloomberg Dollar Spot Index was little changed. Platinum and palladium rose while silver wavered.
Source : Bloomberg
