Gold prices rose on Tuesday, extending a recovery from two-month lows as the dollar retreated from recent peak levels, while rising tensions between Russia and Ukraine also fueled safe-haven demand.
The yellow metal rose sharply from two-month lows this week, as the rise in risk-driven assets, in the wake of Donald Trump’s victory in the 2024 presidential election, appeared to be fading as well.
Spot gold rose 0.4% to $2,622.59 an ounce, while gold futures expiring in December rose 0.5% to $2,626.90 an ounce and spot prices rose about 2% on Monday.
Media reports over the weekend said the United States had allowed Ukraine to use long-range missiles to attack targets deeper into Russian territory.
Russia has warned of dire consequences if Ukraine carries out such attacks, as Moscow continues to launch missile strikes on several Ukrainian territories.
Any potential move by Ukraine to attack Russia with long-range missiles could represent a sharp escalation in the long-running conflict, with gold seeing some safe-haven demand based on this idea.
Broader gold and metals markets also received some support from a weak dollar and Treasury yields, as investors bet that US interest rates will remain lower in the near term.
The dollar has fallen from a one-year high over the past two sessions, while the 10-year Treasury yield fell after hitting its highest level in more than five months last week.
The dollar’s weakness came with strong inflation readings from last week, coupled with less pessimistic signals from the Federal Reserve, which slightly deterred bets that the Fed would cut interest rates in December.
According to the CME Fedwatch Index, traders expected a 25 basis point rate cut in December by 55.7%, and the probability of rates remaining unchanged by 44.3%.
