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Gold prices rise as tensions between Russia and Ukraine escalate
For the third day in a row, gold prices witnessed a significant rise during trading on Wednesday, November 20, reaching their highest levels in a week. This rise reflects the increased demand for the precious metal as a safe haven in light of the escalation of geopolitical tensions, especially due to the Russian-Ukrainian conflict.
Spot gold prices rose by 0.6% to record $ 2,647.43 per ounce by 18:42 GMT, after reaching their highest levels since November 11 earlier in the day. US gold futures also rose by 0.8% to close at $ 2,651.70 per ounce, according to Reuters.
Escalating geopolitical tensions and their impact on markets
The rise was driven by rising geopolitical risks, especially after Ukraine used long-range US weapons for the first time since the conflict began in February 2022, and Russia amended its nuclear doctrine to lower the threshold for using nuclear weapons in response to large-scale attacks with conventional weapons.
Peter Grant, vice president and chief metals analyst at Zaner Metals, noted that these developments boosted demand for safe-haven assets. However, he warned of the potential negative impact of the strong dollar on gold, especially with their recent renewed inverse correlation.
The US dollar index rose after three days of decline, which limited gold’s gains and made it more expensive for buyers in other currencies. In contrast, other metals saw their prices decline:
Silver fell 0.9% to $30.92 per ounce.
Platinum fell 1.8% to $956.87.
Palladium fell 1.8% to $1,016.73.
Gold’s latest rally comes after it posted its biggest weekly loss in more than three years last week. With the dollar still strong and geopolitical tensions rising, the precious metal remains under volatile pressure in global markets.
