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Gold prices edged higher in Asian trade on Friday, driven by a weaker dollar and heightened geopolitical tensions, as traders positioned themselves ahead of a potential December interest rate cut by the Federal Reserve. The precious metal, often viewed as a safe haven, regained some of the ground lost earlier in the week amid a fragile geopolitical landscape.<\/p>\n\n\n\n
The intensification of the conflict between Russia and Ukraine has been a significant driver of recent gold price movements. Russia\u2019s large-scale strikes on Ukraine\u2019s energy infrastructure and threats to target Kyiv with advanced missiles represent a notable escalation in the war. Compounding these tensions, Russia recently lowered its nuclear retaliation threshold, further unsettling global markets.<\/p>\n\n\n\n
In the Middle East, the tenuous Israel-Hezbollah ceasefire added to market jitters. Mutual accusations of truce violations have dampened hopes of sustained peace, prompting investors to seek refuge in gold.<\/p>\n\n\n\n
The U.S. dollar\u2019s retreat this week provided another tailwind for gold. Markets continue to anticipate a December interest rate cut by the Federal Reserve, with traders pricing in a 68.6% chance of a 25 basis-point cut, according to CME\u2019s FedWatch tool. Despite recent data suggesting resilience in U.S. inflation, Fed officials appear inclined toward gradual rate easing.<\/p>\n\n\n\n
The dollar\u2019s decline, alongside these rate cut expectations, bolstered gold\u2019s appeal by making it cheaper for holders of other currencies. Spot gold climbed 0.9% to $2,660.69 an ounce, while gold futures expiring in February gained 0.9%, trading at $2,684.75.<\/p>\n\n\n\n
While the immediate outlook for gold is supported by geopolitical tensions and a softer dollar, the long-term trajectory hinges on U.S. interest rate policy. Inflation remains above the Fed\u2019s 2% target, and expansionary fiscal measures under the Trump administration are likely to keep upward pressure on prices and rates.<\/p>\n\n\n\n
Federal Reserve Chair Jerome Powell and other officials are expected to provide further insights in their upcoming addresses, potentially setting the tone for December\u2019s policy decision.<\/p>\n\n\n\n
Gold\u2019s rally coincided with gains across other precious and industrial metals. Platinum futures rose 1.1% to $947.35 an ounce, and silver futures gained 1.5% to $31.157 an ounce. In the industrial metals space, copper futures on the London Metal Exchange increased 0.7% to $9,061.50 a ton, supported by expectations of improved demand from China.<\/p>\n\n\n\n
All eyes are on China\u2019s upcoming purchasing managers index (PMI) release, which is expected to show an uptick in economic activity. With Beijing implementing substantial stimulus measures in recent months, a positive PMI reading could signal increased demand for industrial metals, potentially boosting copper and other commodities.<\/p>\n\n\n\n
Gold prices remain poised for further gains as traders navigate a complex environment shaped by geopolitical risks, a fluctuating dollar, and evolving U.S. monetary policy expectations. While short-term uncertainties prevail, the precious metal\u2019s safe-haven appeal continues to shine amid an unpredictable global landscape.<\/p>\n","protected":false},"excerpt":{"rendered":"
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