Gold Prices Surge Amid Geopolitical Tensions and Dollar Decline

Gold prices witnessed a significant rise at the beginning of trading today, Friday, driven by escalating geopolitical tensions between Russia and Ukraine, alongside a decline in the performance of the US dollar, which enhanced demand for gold as a safe haven.

Gold Price Performance in Markets

Futures contracts for gold recorded an increase of 0.53%, equivalent to about $15 per ounce, reaching a level of $2679 per ounce. At the same time, spot gold prices rose by 0.82%, an increase of $22, bringing the price per ounce to $2659.

Geopolitical Tensions Drive Gold Upwards

Geopolitical fears intensified after a spike in mutual attacks between Russia and Ukraine, raising concerns about the expansion of the conflict into broader regions. Recent Russian threats, issued by President Vladimir Putin, to target decision-making centers in Kyiv increased uncertainty, especially with Ukraine using Western long-range weapons against Russian territories.

On the other hand, US President Joe Biden emphasized the necessity of supporting Ukraine, indicating that the recent Russian attack on Ukrainian energy facilities, which led to power outages for a million people, reflects the importance of providing support to Kyiv. This atmosphere directly contributed to rising demand for gold as a safe haven.

The Decline of the Dollar Supports Gold Prices

The US dollar index fell by 0.24%, settling at 105.89 points. This decline in the value of the US currency supported gold prices, as the movement of the yellow metal is inversely related to the performance of the dollar in global markets.

Expectations of US Interest Rate Cuts Boost Gold Demand

Market expectations regarding the Federal Reserve's easing of its interest rate hike policy supported gold prices. Current forecasts indicate a likely interest rate cut of 25 basis points during the next meeting, with the likelihood of this decision increasing to 66.3% according to the "FedWatch" tool. This scenario encouraged investors to increase demand for gold as a safe investment.

Performance of Other Metals in the Markets

Alongside gold, other metals achieved notable gains. Silver prices rose by 1.89%, reaching $31.135 per ounce. Platinum contracts climbed by 1.64% to $947.05 per ounce, while palladium prices increased by 1.23% to $999.28 per ounce.

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