Gold Prices Extend Gains Amid Geopolitical Tensions and Dollar Weakness

Gold prices continued to gain significant ground during trading on Thursday, supported by increased demand for the yellow metal as a safe haven amidst rising concerns over global geopolitical tensions, particularly related to the fallout of the Russian-Ukrainian war. This rise has added more momentum to the gold market, which is experiencing a revival for the fourth consecutive day.

Performance of Spot and Futures Gold Contracts:

In trading, futures gold contracts for December delivery rose by 0.58% or by $15 per ounce, trading near $2,666 per ounce. Similarly, spot gold prices increased by 0.56% or by $15 per ounce, trading around $2,665 per ounce.

Reasons for the Rise in Gold Prices for the Fourth Consecutive Session:

One of the main reasons behind this increase in gold prices is the escalation of geopolitical tensions, with media reports indicating Ukraine's use of British "Storm Shadow" and American "ATACMS" missiles against Russian targets, raising global concern about the escalation of the conflict. Russia responded by lowering its nuclear retaliation threshold, warning of serious escalation that may pose greater threats to regional and international stability, which has enhanced gold’s appeal as a safe asset in times of crisis.

The continuous gains in gold reflect strong global demand for the precious metal as a safe haven amidst geopolitical and economic crises. With these developments ongoing, gold is expected to remain in the spotlight for investors seeking protection from market fluctuations.

On the economic side, the slowdown in the performance of the US dollar has contributed to the gains in gold. Investors are awaiting clearer guidance from the US Federal Reserve regarding future monetary policy, especially with market expectations for a potential interest rate cut in December, which has weakened the dollar’s performance and increased gold's attractiveness.

Additionally, gold's gains have been supported by the halt in the rise of the US dollar, as traders await clarification from the US Federal Reserve regarding the future of monetary policy, particularly as the FedWatch tool shows that markets see a 52% chance of a 25 basis point rate cut in December.

Regarding other precious metals, silver increased by 0.31% in trading, reaching $31.100 per ounce, while platinum declined by 0.04% to $965.35. Palladium rose by 1.08%, reaching $1,037.03 per ounce.

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