Gold prices are on track for their best weekly performance in 2024, surpassing the $2,700 mark, supported by increased demand for safe-haven assets amid escalating tensions between Russia and Ukraine. Investors are also pricing in expectations of a rate cut in the US. This rally is helping to strengthen gold’s status as a safe haven in times of uncertainty.
The market analyst stated that escalating tensions between Russia and Ukraine and the risks of further conflicts support gold.
In addition to these geopolitical factors, economic concerns and lower interest rates also support gold. The President of the Federal Reserve Bank of Chicago indicated his support for further interest rate cuts in the US, stressing the possibility of slowing the pace of these cuts. In terms of market expectations, data from the US interest rate tracker tool showed a 59.4% probability of a 25 basis point rate cut at the next Fed meeting in December.
On the other hand, the market continues to react to global economic developments, as investors closely monitor international events. Given this situation, analysts expect gold prices to continue making further gains if economic and geopolitical concerns keep impacting global markets. The future outlook for gold prices remains somewhat mixed, as it depends on a range of economic and geopolitical factors. It is important for investors to closely follow upcoming events, especially those related to developments in the Russian-Ukrainian conflict and any decisions related to changing interest rates in the United States, as they can have a significant impact on financial markets. These movements indicate that gold may remain in a strong position in the coming period, especially if global crises continue to impact financial markets.
Geopolitical and economic tensions continue
Investors are expected to await the Michigan Index data, which will be released at 18:00 Riyadh time. Also, comments by Michelle Bowman, a member of the Federal Reserve, will be followed for additional indications regarding the path of future interest rate cuts. These data may provide important signals about the direction of monetary policy in the United States and affect global financial markets.
The head of global institutional markets stated that important US economic data, which analysts expect next week, may affect the movement of gold prices in the short term. Among these data, the focus will be on the preliminary GDP data and the core PCE price index. Expectations indicate that gold prices may target a range between $2,690 and $2,715, based on recent market trends.
Geopolitical and economic tensions continue to have a significant impact on gold price movements. As investors monitor developments in the situation in Ukraine and its implications for the global economy, gold remains a safe haven for investors seeking to protect their assets from increasing risks. Moreover, the decline in interest rates indicates that demand for gold is likely to remain strong in the short term. US economic data is expected to help determine the direction of financial markets in the coming period. If the data proves weak or shows a decline in economic growth, demand for gold as a safe investment tool may increase. On the other hand, if the data comes out strong and shows an improvement in the US economy.
Close monitoring of this data and the future policies that the Federal Reserve will follow will remain pivotal in determining the path of gold prices in the coming days.
Gold prices on the rise supported by increasing demand
Gold prices recorded strong gains in Thursday’s trading, driven by the increase in demand for safe-haven assets amid escalating geopolitical tensions between Russia and Ukraine. This escalation contributed to attracting investors towards gold as a safe haven to protect their money from potential risks.
At the settlement of trading, December gold futures prices rose by 0.85%, equivalent to $23.2, to reach $2,674.90 per ounce. This price is the highest for gold since the end of the November 8 session, which was at $2,694.80. Thus, the yellow metal shows clear strength in the face of tense geopolitical conditions.
As for spot gold, it rose by 1% to reach $2,697 per ounce. Thus, gold recorded weekly gains estimated at about 5%, the best since early October 2023. Gold futures in the United States also increased by 0.95% to reach $2,701. These gains reflect a strong increase in demand for the yellow metal amid concerns over global developments.
On the other hand, the dollar index stabilized at 106.94 points. This stability in the value of the dollar helps support the continuation of gold gains, as investors tend to buy the yellow metal when the value of other currencies declines or is unstable.
As for other metals, the spot price of silver rose by 0.3% to reach $30.88 per ounce, reflecting the increased demand for precious metals. On the other hand, platinum fell by 0.1% to reach $959.50 per ounce. On the other hand, palladium recorded a rise of 0.3% to reach $1032.90 per ounce. Despite the variance between these metals, all of them are expected to achieve weekly gains.
Overall, gold prices continue to rise supported by increased demand amid geopolitical tensions and economic concerns.
