The price of gold experienced a rise for the fourth straight day as the US dollar weakened and escalating tensions in Ukraine increased the demand for safe-haven assets.
On Friday, bullion jumped by as much as 1.1%, nearing $2,666 per ounce, following Russian President Vladimir Putin’s remarks indicating that his forces might target “decision-making centers” in Kyiv with ballistic missiles. At the same time, the dollar fell against major currencies, with the dollar index on track for its first weekly decline in two months, rendering gold more accessible for many investors.
Despite this increase, bullion is still down about 2% for the week, attributed to indications of decreased tensions in the Middle East, as a US-brokered cease-fire between Israel and Hezbollah is set to begin on November 27.
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This year, gold has surged nearly 30%, fueled by the US Federal Reserve’s monetary easing, acquisitions by central banks, and heightened geopolitical and economic uncertainties. Some analysts predict that new highs could be reached in 2025, as both Goldman Sachs Group and UBS Group AG have released optimistic projections this month.
As of 10:24 a.m. in London, spot gold rose by 0.9% to $2,662.52 per ounce. The Bloomberg Dollar Spot Index declined by 0.2% and has fallen by 1.1% this week. Other precious metals, such as silver, platinum, and palladium, also recorded gains.
Swaps markets are now estimating a two-thirds probability that the Fed will reduce borrowing costs again next month, a notable increase from nearly even odds earlier this week. Generally, lower borrowing costs benefit gold, which does not yield any interest.
© 2024 Bloomberg
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