WASHINGTON (dpa-AFX) - Persisting geopolitical tensions in Eastern Europe triggered further safe haven bids on the yellow metal boosting prices by more than half a percent. The recent escalation in tensions between Russia and Ukraine and fears of a wider war lifted gold prices for the fifth day in a row.
The surge in gold prices is despite the resurgence in the dollar. The Dollar Index which measures the U.S. Dollar's strength against a basket of 6 currencies touched a close to 2-year high of 108.07 earlier in the day. It is currently at 107.44 implying overnight gains of 0.40 percent.
Unabated rate cut expectations also supported the rally in Gold. Despite labor market data from the U.S. showing an unexpected decline in weekly initial jobless claims, markets still expect a 25-basis points rate cut by the Fed in December. The CME FedWatch tool shows the likelihood of a quarter point cut at 59 percent. Only 41- percent probability is assigned to a pause.
Both Spot Gold and Gold Futures added to Thursday's gains.
Gold Futures for December settlement has rallied 0.68 percent overnight to trade at $2,693.00, versus the previous close of $2,674.90.
The day's trading range has been between $2,670.30 and $2,712.30 as compared with the 52-week trading that ranged between $1,979 and $2,801.80.
With today's rally, weekly gains have increased to 5.3 percent and losses over the past month have reduced to 0.4 percent. On a year-to-date basis, the yellow metal has rallied 30.6 percent. The price surge over the 3-year horizon is more than 51 percent.
Spot Gold added 0.91 percent overnight to trade at $2,693.98 per troy ounce. The day's trading range has been between $2,668.23 and $2,710.15. Spot Gold had ranged between $1,973.09 and $2,790.41 over the past 52 weeks.
At current prices, Gold Futures and Spot Gold have both gained more than 34 percent over the past year.
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