Gold prices rose on Wednesday, gaining more ground as safe haven demand was buoyed by heightened tensions over Russia and Ukraine, although resilience in the dollar limited overall gains.
The yellow metal rebounded sharply from two-month lows this week, taking some relief from mild weakness in the dollar. But the greenback steadied from recent losses on Wednesday, limiting gold’s gains.
Spot gold rose 0.7% to $2,650.19 an ounce, while gold futures expiring in December rose 0.9% to $2,653.65 an ounce by 4:46 p.m. ET (21:46 GMT).
Russia-Ukraine war in focus after Moscow’s nuclear threat
Increased tensions between Russia and Ukraine were the biggest point of support for gold, as safe haven demand increased after Moscow lowered the threshold for nuclear retaliation over Ukrainian attacks.
The move was in response to the U.S. reportedly authorizing the use of long-range missiles by Ukraine against Russia, which Moscow warned could mark a dire escalation in the conflict.
Still, Russian Foreign Minister Sergei Lavrov said the country would do all it could to avoid nuclear war. But hostilities with Ukraine persisted, as both countries launched debilitating attacks against each other over the past week.
Dollar steadies, limits gold upside
But strength in the dollar limited gold’s recovery this week, especially as the greenback steadied from three days of losses on Wednesday. The dollar also remained close to a one-year high hit last week.
Markets remained uncertain over just what a Donald Trump presidency will entail for the U.S. economy and interest rates, amid some doubts over whether the Federal Reserve will cut rates in December.
Traders were seen pricing in a 61% chance for a 25 basis point cut, and a 39% chance rates will remain unchanged, CME Fedwatch showed.
Gold had plummeted from record highs after Trump’s election victory earlier in November, although this trade now appeared to be cooling.
Other precious metals also stalled on Wednesday after some gains this week. Platinum futures fell 1.3% at $966.35 an ounce, while silver futures fell 1% to $30.935 an ounce.
Among industrial metals, benchmark copper futures on the London Metal Exchange decline 0.3% to $9,091.00 a ton, while December copper futures rose 0.2% to $4.1520 a pound.
Copper was also nursing steep losses in recent weeks, especially as recent stimulus measures from top importer China underwhelmed.
Markets took middling cues from China keeping its benchmark loan prime rate unchanged on Wednesday.
