Gold Wavers as Traders Eye Developments of War in Ukraine
Gold traded in a narrow range, as traders keep a close watch on developments related to the Kremlin’s war in Ukraine.
Bullion edged higher, erasing earlier losses. Russia said it’s ready to talk with US President-elect Donald Trump about a potential cease-fire with Ukraine, though Western officials are skeptical.
Geopolitical tensions added to gold’s advance earlier this week, after Russian President Vladimir Putin approved an updated nuclear doctrine expanding the conditions for using atomic weapons. Meanwhile, Ukraine made its first strike into Russia with American missiles. Investors typically seek safety in the precious metal at times of uncertainty.
The Bloomberg Dollar Spot Index rose 0.4% Wednesday, staging a modest recovery from a three-day drop. Traders are also keeping an eye on the Federal Reserve’s rate-cut path. While the US central bank has pivoted to monetary easing, the pace at which it lowers interest rates in the future is uncertain.
“Heightened geopolitical risk, coupled with broad market uncertainty and rising concerns about unknown risks since the pandemic, has rekindled interest in the gold market as a safe-haven asset,” Standard Chartered Plc analyst Suki Cooper said in a note. “But macro factors — including the US dollar and rate-cut expectations — are likely to set the tone in the near term.”
Bullion has rallied by more than a quarter this year, with gains underpinned by central-bank buying, the Fed’s pivot and geopolitical tensions in Europe as well as the Middle East. Goldman Sachs Group Inc. has backed the metal to extend its advance to $3,000 an ounce next year, while UBS Group AG sees it hitting $2,900.
Spot gold traded 0.1% up at $2,635.52 an ounce as of 2:04 p.m. in London. Silver and platinum declined, while palladium rose.
Source : Bloomberg
