Gold Gains as Traders Flock to Haven as Ukraine Fires Missiles
Gold extended gains for a third day as traders sought haven in the precious metal while digesting the latest developments on Russia’s war with Ukraine.
Ukraine’s armed forces fired British cruise missiles at military targets inside Russia for the first time, a Western official familiar with the matter said, as the 1,000-day conflict enters a new phase. Meanwhile, Russia said it’s ready to talk with US President-elect Donald Trump about a potential ceasefire 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. Investors typically seek safety in the precious metal at times of uncertainty.
“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.”
The Bloomberg Dollar Spot Index rose 0.5% Wednesday, staging a 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.
Bullion has rallied by more than 28% this year, with gains underpinned by central-bank buying, the Fed’s pivot and geopolitical tensions in Europe and the Middle East. Goldman Sachs Group Inc. sees gold extending its advance to $3,000 an ounce by the end of next year, while UBS Group AG sees it hitting $2,900.
Spot gold traded 0.6% higher to $2,647.39 an ounce as of 11:11 a.m. in New York. Silver, platinum and palladium declined.
Source : Bloomberg
