Gold Prices Surge Amid Geopolitical Tensions and Safe-Haven Demand

Gold prices continued to climb significantly on Wednesday, driven by increased demand for the yellow metal as a safe haven amid rising geopolitical tensions, particularly due to the ongoing Russia-Ukraine war. In uncertain times, investors often turn to gold as a reliable option to preserve wealth.

Spot and Futures Gold Contract Performance:

Gold futures for December delivery rose by 0.98%, or $26 per ounce, settling near $2657 per ounce. Spot gold prices also saw an increase of 0.79%, gaining $20 per ounce and trading around $2652 per ounce.

Why Did Gold Prices Rise for the Third Consecutive Session?

Gold prices surged for the third consecutive day, fueled by mounting concerns over global geopolitical instability, notably the continuing Russia-Ukraine conflict. This has heightened the demand for gold as the preferred safe haven for investors during times of uncertainty.

Recent reports highlighted that Ukrainian forces launched British-made cruise missiles at military targets in Russia for the first time, marking a new phase in the conflict, now entering its thousandth day. This escalation has intensified fears of an expanded war and the possibility of a broader global conflict, especially after Russian President Vladimir Putin approved an updated nuclear policy, which increases the conditions for the use of nuclear weapons.

Moreover, optimism surrounding future gold price increases has also contributed to the surge. Experts at Goldman Sachs have forecast continued rises in gold prices through 2025, particularly coinciding with the start of Donald Trump's potential presidential term. They predict that gold could reach new record levels next year, driven by central bank actions and expected reductions in U.S. interest rates.

Performance of Other Metals:

Meanwhile, silver futures declined by 0.30%, stabilizing near $31.168 per ounce, while platinum contracts fell by 1.16%, closing at $967.20. Palladium also saw a drop of 1.33%, trading at around $1023.52 per ounce.

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