Gold prices have surged for the fourth consecutive day, driven by safe-haven demand amid growing tensions in the Russia-Ukraine conflict. On Thursday, spot gold rose by 0.3%, reaching $2,657.41 per ounce, its highest level since November 11. US gold futures also gained 0.3%, reaching $2,660.00.
The escalation of the war, particularly the increasing use of Western weapons by Ukraine—such as British Storm Shadow cruise missiles fired into Russia—has contributed to the rise in gold prices. This has intensified fears of a broader regional conflict, including the potential use of nuclear weapons. Analysts, such as Kyle Rodda from Capital.com, have highlighted that these geopolitical risks are pushing investors toward gold as a safer investment option.
Additionally, the United States’ veto of a UN Security Council resolution calling for a ceasefire in Gaza has added to global geopolitical uncertainties, further boosting gold's appeal. Economic factors also play a role in the rising demand for gold, as a low interest rate environment continues to persist.
The weakening of the US dollar by over 0.1% on Thursday also made gold more affordable for international buyers, supporting its price increase.
Investors are closely watching remarks from Federal Reserve policymakers, with expectations that they may offer clues on the future direction of interest rates. Markets are currently pricing in a 56% chance of a 25-basis point US rate cut in December. While this potential rate reduction could limit gold's appeal in the short term, analysts remain optimistic about gold’s long-term prospects.
Gold's upward movement is also reflected in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, which reported a 0.36% increase in its holdings to 875.39 tonnes on Wednesday.
Meanwhile, other precious metals also saw gains, with silver rising 0.8% to $31.11 per ounce, platinum increasing 0.4% to $965.30, and palladium advancing 0.7% to $1,027.84.
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