
The price of gold has increased for the fourth day in a row, driven by a weakening US dollar and rising tensions in Ukraine that have boosted the demand for safe-haven assets.
On Friday, bullion jumped as much as 1.1%, trading near $2,666 per ounce, following a warning from Russian President Vladimir Putin about potential ballistic missile strikes on “decision-making centers” in Kyiv. At the same time, the dollar weakened against major currencies, with the dollar index on track for its first weekly drop in two months, making gold more accessible to a broader range of investors.
Nonetheless, despite this uptick, bullion is down about 2% for the week due to signs of decreasing tensions in the Middle East, with a US-brokered cease-fire between Israel and Hezbollah scheduled to begin on November 27.
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This year, gold has risen nearly 30%, supported by the US Federal Reserve’s monetary easing policies, central bank purchases, and heightened geopolitical and economic uncertainty. Some market analysts predict potential new peaks in 2025, with optimistic forecasts being released this month from both Goldman Sachs Group and UBS Group AG.
As of 10:24 a.m. in London, spot gold increased 0.9% to $2,662.52 per ounce. The Bloomberg Dollar Spot Index fell by 0.2% and has dropped 1.1% this week. Other precious metals, such as silver, platinum, and palladium, also recorded increases.
Swaps markets currently indicate a two-thirds likelihood that the Fed will reduce borrowing costs next month, a substantial rise from nearly equal chances earlier this week. Generally, lower borrowing costs are favorable for gold, which does not earn interest.
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