Investing.com — Gold prices rose on Wednesday, gaining more ground as safe-haven demand was boosted by heightened tensions over Russia and Ukraine, although the dollar’s resilience limited overall gains.
The yellow metal recovered sharply from two-month lows this week, providing some relief from mild dollar weakness. But the dollar held steady after recent losses on Wednesday, limiting gold’s gains.
rose 0.7% to $2,650.19 per ounce, while the December expiration rose 0.9% to $2,653.65 per ounce at 4:46 PM ET (9:46 PM GMT).
War between Russia and Ukraine in focus after Moscow’s nuclear threat
Increased tensions between Russia and Ukraine were the biggest support for gold, as demand for safe havens increased after Moscow lowered the threshold for nuclear retaliation against Ukrainian attacks.
The move was in response to the US reportedly authorizing Ukraine’s use of long-range missiles against Russia, which Moscow warned could mean a serious escalation of the conflict.
Still, Russian Foreign Minister Sergei Lavrov said the country would do everything it can to prevent nuclear war. But hostilities with Ukraine continued as both countries launched debilitating attacks on each other over the past week.
Dollar remains stable, limits gold’s upward movement
But the main thrust of gold’s limited recovery this week came as the dollar stabilized after three days of losses on Wednesday. The dollar also remained near a one-year high last week.
Markets remained uncertain about what exactly Donald Trump’s presidency will mean for the US economy and interest rates, while there was some doubt over whether the Federal Reserve will cut rates in December.
Traders were pricing in a 61% chance of a 25 basis point cut, and a 39% chance of it being unchanged, it showed.
Gold had fallen from record highs following Trump’s election victory earlier in November, although this trade now appeared to be cooling.
Other precious metals also stalled on Wednesday after some gains this week. fell 1.3% to $966.35 per ounce, while the price fell 1% to $30.935 per ounce.
Among industrial metals, the benchmark on the London Metal Exchange fell 0.3% to $9,091.00 per tonne, while the benchmark rose 0.2% to $4.1520 per pound in December.
Copper has also suffered steep losses in recent weeks, especially as recent stimulus measures from top importer China left much to be desired.
Markets took mediocre cues from China and left their benchmark unchanged on Wednesday.
(Ambar Warrick contributed to this article)
