Gold prices edged higher on Wednesday, supported by increased safe-haven demand driven by escalating Russia-Ukraine tensions. However, gains were capped by a firm dollar. The yellow metal recovered from recent two-month lows earlier in the week, aided by slight dollar weakness. Yet, the greenback stabilized on Wednesday, curbing gold’s momentum.
Spot gold rose 0.2% to $2,636.28 per ounce, while December gold futures gained 0.3% to $2,639.50 per ounce as of 23:35 ET.
Russia-Ukraine Conflict Intensifies Amid Nuclear
Rising geopolitical tensions provided key support for gold as demand for safe-haven assets surged. This followed Moscow’s decision to lower the threshold for nuclear retaliation in response to Ukrainian attacks, escalating fears of a more severe conflict.
The move came after reports that the U.S. had approved the use of long-range missiles by Ukraine, prompting Moscow to warn of serious escalation risks. While Russian Foreign Minister Sergei Lavrov emphasized efforts to avoid nuclear war, hostilities between the two nations continued, marked by significant attacks over the past week.
Despite gold’s recovery, a resilient dollar limited its upside. The dollar, which recently touched a one-year high, steadied after three days of declines. Uncertainty surrounding the potential economic and interest rate policies under a Donald Trump presidency added to market caution, alongside lingering doubts about whether the Federal Reserve will lower rates in December.
Traders assessed a 61% probability of a 25 basis point rate cut and a 39% chance of rates remaining unchanged, according to CME FedWatch data.
Gold, which had sharply declined from record highs following Donald Trump’s election victory earlier in November, showed signs of stabilizing as the initial post-election sell-off eased.
Other precious metals saw limited movement on Wednesday. Platinum futures remained steady at $979.25 per ounce, while silver futures were unchanged at $31.260 per ounce.
In industrial metals, benchmark copper futures on the London Metal Exchange gained 0.3% to $9,150.50 per ton, while December copper futures inched up 0.1% to $4.1713 per pound.
Copper, however, has struggled in recent weeks, weighed down by disappointing stimulus measures from China, the world’s largest importer. Markets received mixed signals after China maintained its benchmark loan prime rate on Wednesday.
