Gold Poised for Biggest Weekly Gain in Eight Months Amid Escalating Tensions

Gold maintained its upward momentum on Friday, setting the stage for its largest weekly gain in nearly eight months. The precious metal’s appeal as a safe haven surged amid heightened geopolitical tensions, as Russia lowered its nuclear weapon usage threshold and launched a hypersonic missile at Ukraine. Spot gold remained steady at $2,677 per ounce, climbing over 4.5% for the week.

Escalating Geopolitical Risks Bolster Safe-Haven Demand
European markets reflected broader risk aversion, with gas prices soaring to a one-year high as concerns of conflict escalation loomed. Investors flocked to traditional safe havens like German bonds and the Swiss franc, which recorded its first weekly rise in two months.

Mixed Performance Across Global Markets
In Asia, chipmakers led gains, fueled by Nvidia’s record-breaking performance in U.S. trade following robust earnings. Taiwan and South Korea’s indices climbed more than 1%, while Japan’s Nikkei advanced 0.8%. Bitcoin also hovered near a historic milestone, flirting with the $100,000 mark.

Conversely, European markets struggled. The euro dropped to $1.0469, nearing last year’s low of $1.0448, as the region grappled with U.S. tariffs, slowing growth, and political instability in Germany and France. European equities were on track for a fifth consecutive weekly decline, contrasting with a 1% gain in global stocks this week.

Energy Markets and Commodity Prices React
Oil prices saw significant gains, with Brent crude futures climbing nearly 4.5% for the week, reaching a two-week high of $74.44 a barrel in Asian trading. Meanwhile, assets tied to India’s Adani Group faced pressure following U.S. fraud allegations against its chairman, Gautam Adani, causing losses in the group’s dollar bonds.

Currency and Bond Markets Steady Amid Policy Speculation
The dollar index edged up 0.4% for the week, trading at 107.05. U.S. 10-year Treasury yields remained stable at 4.432%, reflecting a tempered outlook on Federal Reserve rate cuts, with market-implied probabilities for a December cut dropping to 58% from 83% a week earlier.

In Japan, core inflation in October stayed above the Bank of Japan’s 2% target, keeping speculation alive for a potential December rate hike. The yen firmed to 154.38 per dollar, even as it remained down 4% for the quarter.

Outlook
With geopolitical tensions dominating headlines and central bank decisions looming, global markets remain on edge. Gold’s rally underscores investor anxiety, while broader equity markets display a mixed picture, weighed down by Europe’s struggles and buoyed by tech-sector resilience. As central banks deliberate on monetary policy, volatility across asset classes is likely to persist.