Investing.com — Gold prices rose on Friday, benefiting from a weaker dollar as traders bet on a rate cut in December, while increased geopolitical tensions also boosted demand for ports.
The yellow metal suffered some losses last week after the announcement of a ceasefire between Israel and Hezbollah. But increased tensions between Russia and Ukraine helped prices limit some weekly losses on Thursday and Friday.
rose 0.6% to $2,659.14 per ounce, while the February term rose 0.7% to $2,683.79 per ounce at 1:24 ET (1824 GMT).
Tensions between Russia and Ukraine are fueling demand for safe havens
Russia launched its second major attack on Ukraine’s energy infrastructure this week and also threatened to attack areas in Kiev with advanced ballistic missiles.
Moscow’s offensive came in response to Ukraine’s use of Western-made long-range missiles against Russia, which the latter warned would mark a serious escalation of the conflict.
Russia had also lowered the threshold for nuclear retaliation earlier in November.
Doubts were raised in the Middle East over a recent ceasefire between Israel and Hezbollah after the two accused each other of violating the ceasefire.
A softer dollar is supporting gold as markets bet on a rate cut in December
Gold’s gains were also helped by a decline in the dollar, as markets maintained expectations that the Federal Reserve would still cut rates in December.
Traders were betting on a 68.6% chance that the Fed would cut rates by 25 basis points, and a 31.4% chance that rates would remain unchanged, it showed.
Bets on a December cut persisted even as recent data showed resilience in U.S. inflation, with Fed officials backing a gradual rate cut.
These fell sharply this week, also giving up some gains made in the wake of Donald Trump’s election victory earlier this month.
But the long-term outlook for US yields is uncertain as inflation remains well above the Fed’s 2% target. The expansionary policies under Trump are also expected to support inflation and interest rates.
A slew of Fed officials, including , are scheduled to speak next week before the December rate decision.
Broader metals prices rose on Friday, following a softer dollar. rose 2.5% to $954.80 per ounce, while the price rose 1.8% to $31.102 per ounce.
Among industrial metals, the benchmark on the London Metal Exchange rose 0.3% to $9,020.50 per tonne, while February was flat at $4.1427 per pound.
Copper markets awaited Saturday from top importer China. The figures are expected to show a rebound in activity after Beijing introduced a slew of massive stimulus measures over the past two months.
(Ambar Warrick contributed to this article)
