Gold rises as US Dollar dips on Rusia-Ukraine concerns
Gold price rallied over 1.80% at the beginning of the week and climbed above $2,600 after falling to a two-month low of $2,536. An escalation of the Russia-Ukraine conflict, along with a weak US Dollar, opened the door for Gold’s leg up on Tuesday. At the time of writing, XAU/USD trades at $2,610.
Wall Street sentiment is mixed. Two of the four largest US equity indices trade with gains, while the other two fluctuate. Geopolitics continued to drive the bullion’s price action after Russia’s massive attack on Ukraine triggered a reaction by the White House.
Recently, two officials revealed that US President Joe Biden authorized Ukraine's use of long-range missiles inside Russia, CNN revealed. The decision comes as a reaction to thousands of North Korean troops being deployed in support of Moscow’s war effort.
This weighed on the Greenback, which, according to the US Dollar Index (DXY) that tracks the buck's performance against a basket of six currencies, dropped some 0.38% to 106.27.
Nevertheless, former US President Donald Trump’s victory bolstered the Greenback on fears that tariffs and lower taxes are seen as potential drivers of inflation and might slow the Fed’s easing cycle.
The Fed is expected to lower borrowing costs for the third straight meeting in December. Nevertheless, recent data has witnessed investors trimming the odds from an 82% chance of an imminent cut of 25 basis points (bps) to 62%, according to CME FedWatch Tool data.
Ahead of this week, the US economic schedule will feature housing data, Initial Jobless Claims, S&P Global Flash PMIs, and the University of Michigan (UoM) final reading of Consumer Sentiment for November.
Source : Fxstreet
