By Sherin Elizabeth Varghese
(Reuters) – Gold prices soared on Monday, after six days of losses, as the U.S. dollar’s surge stalled and heightened uncertainty over the Russia-Ukraine conflict rekindled safe-haven demand.
Spot gold jumped 1.9% to $2,608.88 per ounce by 10:17 a.m. ET (1517 GMT), moving away from a two-month low on Thursday. U.S. gold futures climbed 1.7% to $2,613.40.
“Part of it is (President) Biden’s announcement of long-range missiles for Ukraine to reach deeper into Russian territory. I think some of it is prompting safe-haven demand for gold,” said Daniel Pavilonis, senior market strategist at RJO Futures.
Gold, which is considered a safe investment during economic and geopolitical turmoil, posted its steepest weekly drop in more than three years last week as President-elect Trump’s proposed tariffs are seen as potential drivers of inflation, which could prompt the Fed to slow its rate-cutting pace.
This in turn boosted the dollar index to trade at a one-year high on Thursday. However, the greenback fell 0.2% on Monday after rising 1.6% last week. A softer dollar makes gold more affordable for buyers using other currencies. [USD/]
“Whether the Federal Reserve cuts or not, I think gold technically looks like it wants to get back near that $2,700 level,” Pavilonis said.
The U.S. central bank is widely expected to deliver a third rate cut in December, although recent data showed progress in bringing inflation back to its 2% target has stalled. At least seven Fed officials are scheduled to speak this week.
Higher interest rates, which make non-yielding assets like gold less appealing, could further pressure the metal.
“Bulls’ next upside (gold) price objective is to produce a close above solid resistance at $2,650,” said Kinesis Money.
Spot silver rose 3% to $31.13 per ounce, platinum added 2.2% at $959.37 and palladium climbed 4.4% to $992.34.
(Reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Alexander Smith)
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