Investing.com — Gold prices rose in Asian trading on Friday, taking advantage of a weaker dollar as traders bet on a December interest rate cut, but rising geopolitical tensions also boosted haven demand. .
The yellow metal suffered some losses in the week following the announcement of the ceasefire between Israel and Hezbollah. However, prices pared some of their weekly losses on Thursday and Friday due to rising tensions between Russia and Ukraine.
By 11:40 p.m. ET (4:40 p.m. Japan time), the February deadline rose 0.9% to $2,684.75 an ounce.
Russia-Ukraine tensions fuel demand for safe havens
Russia launched its second major attack on Ukraine's energy infrastructure this week and also threatened to attack areas in Kiev with advanced ballistic missiles.
The Russian attack came in response to Ukraine's use of Western-made long-range missiles against Russia, which Moscow warned signaled a dire escalation of the conflict.
Russia also lowered its standards for nuclear retaliation in early November.
In the Middle East, the recent ceasefire between Israel and Hezbollah has been called into question after both sides accused each other of violating the ceasefire.
Weak dollar lifts gold as market bets on December interest rate cut
The market maintains the view that the US Federal Reserve (Fed) will cut interest rates in December, and the fall in the dollar has also spurred the rise in gold prices.
Traders see a 68.6% chance that the Fed will cut interest rates by 25 basis points and a 31.4% chance that rates will remain unchanged.
While recent data has shown the resilience of U.S. inflation, expectations for a December rate cut persisted, even though Fed officials support gradual rate cuts.
It has fallen sharply this week, erasing gains made in the wake of Donald Trump's election victory earlier this month.
But the long-term outlook for U.S. interest rates is uncertain, given that inflation remains well above the Fed's 2% target. The Trump administration's expansionary policies are also expected to support inflation and interest rates.
A number of Fed officials, including , are scheduled to speak next week ahead of December's rate decision.
A wide range of metal prices rose on Friday, following the dollar's weakness. rose 1.1% to $947.35 an ounce and rose 1.5% to $31.157 an ounce.
In industrial metals, the London Metal Exchange index rose 0.7% to $9,061.50 a tonne, compared with a 0.8% rise in February to $4.1640 a tonne.
Copper markets were awaiting an announcement from China, the biggest importer, scheduled for Saturday. The statistics are expected to show a pick-up in activity after the Chinese government has rolled out a slew of stimulus packages over the past two months.
