As of 12:22 GMT, XAU/USD is trading at $2699.47, up $29.82 or +1.12%.
Safe Haven Demand Fuels Gold Rally
Gold surged 5%, posting its best week in more than a year, amid heightened geopolitical tensions between Russia and Ukraine. Spot gold hit its highest since early November, and U.S. gold futures followed suit. This rally continues despite the US dollar hitting a 13-month high, underscoring strong safe-haven demand.
Geopolitical uncertainty has been a major catalyst, with Ukraine reporting attacks on key Russian infrastructure. Analysts including UBS's Giovanni Staunovo say both gold and the dollar are attracting safe-haven flows, making for an unusual simultaneous rally. Bitcoin's nearing the $100,000 level further highlights investors' hedging against global risks.
Interest rate expectations influence sentiment
Expectations for Federal Reserve policy changes continue to shape market outlook. The CME FedWatch tool shows a 59.4% chance of a 25 basis point rate cut at the December meeting. But strategists like ANZ's Soni Kumari warn that if the Fed forgoes or delays this rate cut, gold prices could face a near-term decline. Chicago Fed President Austan Goolsby's recent dovish comments hint at further rate cuts, supporting the bullish outlook for gold.
